Economists weigh in

A famous quote from President Ronald Reagan advising his Vice President George H.W. Bush about the focus for presidential elections is “it is the economy, stupid.” From the outset of this election, Donald Trump has touted his business skills making him the best person suited to lead our economy. Yet, what is funny is he forgot to convince the economists, who support Hillary Clinton as the best guide for our economy.

In short, the economists have modeled that Trump’s economic plan would create a malaise or recession. It will also increase the debt significantly. Clinton’s economic plan has been rated neutral to positive on its economic impact and its impact on the debt is much smaller.

Per the analysis (see link below) of the non-partisan Committee for a Responsible Federal Budget, this organization estimates Trump’s economic plan would increase our $19 trillion debt by $5.3 trillion, while Clinton’s would increase it by only $200 billion. Note, both are in the wrong direction, but the business man’s proposal would increase the debt by 27x more than his opponent’s plan.

It should also be noted that the National Association for Business Economics rates Clinton at 55% as the best candidate for the economy, with Trump placing third at 14%, behind Gary Johnson at 15%. This group represents working economists and not think tank economists.

Please refer to the attached article for more on the subject. As an aside, there are several investigative news pieces which note that Trump’s sales skills greatly exceed his business management skills as evidenced by six bankruptcies, 3,500 lawsuits and a host of other ill-timed ventures here and abroad. The key is we should not buy the story he is selling.

http://crfb.org/papers/promises-and-price-tags-preliminary-update

The $65,000 Question

Let’s start with a question. As a seller of contractual services, do you make more money if you charge a new client $65,000 or $70,000? The answer is not obvious, but it may be the smaller amount. Why?

What if you told the client you would do the work for $65,000? But, your company had some cost overruns that may or may not have been the client’s fault taking the cost to $70,000. If you told the client, we had some overruns, but told you it would be $65,000, so that is what we will invoice, you will create goodwill and trust. Your firm may get hired for future work as a result. If you billed the $70,000, you may not get hired again.

But, what if you told the client it would be $70,000 and you were more efficient. By invoicing the lesser amount, you will have done something unusual and it will be noticed. This may also lead you to being hired for future work.

The key that gets lost on managers who push for billing every cent in the system is most services are relationship based. If trust is established, the opportunity to have a mutually beneficial relationship exists. You make more money serving the client long term. When trust is broken, all bets are off.

This is a hard lesson organizations like Wells Fargo are learning today. And, if you doubt the veracity of this observation, the most acclaimed accounting firm used to be Arthur Andersen. They no longer exist as they breached the trust of a significant client and they could never recover.

A look at Trump’s global business dealings is a caution for his presidency

If Americans are concerned about what a Donald Trump presidency would look like, I would suggest you read the Kurt Eichenwald of Newsweek article from last week on how Trump has managed his foreign business affairs. Or, you could link to the CNN interview with Eichenwald below.

This issue is of significant importance, as it reveals management dealings with heads of state as well as people with nefarious backgrounds. Plus, it shows that should Trump win, he cannot merely place his business in a blind trust managed by his children, as his presidency would still create a huge conflict of interest, that would endanger national security. This is especially true with a man who has impulsive reactions to disappointment or pushback.

Several relationships jump out at me, so I will summarize them the best I can.

  • He so offended President Erdogan of Turkey in a speech at an opening ceremony for a venture with a business party in that country, the partner was later arrested. Erdogan has said about Trump, if he wins the election, the US will be denied access to the air base we use now to battle ISIS.
  • He has dealings with a partner in Azerbaijan whose father launders money for some bad actors in Iran.
  • He has had up and down dealings in India, with one of the properties being built on land whose ownership is now in question. He was earlier denied access to other relationships by the government, but the author notes, if he were President, would they have stuck to their guns and denied him access?
  • He has been in Twitter spitting contests with an investor in Saudi Arabia that is related to the royal family and he has had financial dealings with Muammar Gaddafi who was removed from power and executed by the Libyan uprising.
  • He has ties with a South Korean man who was convicted of fraud and fled to North Korea. He has since returned, but should Trump get his way to make South Korea be totally responsible for its protection, this man would hugely benefit as he is in the defense business.

Eichenwald shares several concerns about Trump’s potential conflicts of interest, but also his temperament and judgment in who partners with. Rather than mention further issues, it is worthwhile to at least listen to Eichenwald or read his article in Newsweek. This is true irrespective of who you might be voting for as win or lose, this man has the potential to cause global problems.

http://www.cnn.com/videos/world/2016/09/14/newsweek-probes-trump-foreign-business-deals-eichenwald-interview.cnn

A few favorite cities

What are your favorite cities to visit? Through business and pleasure, I have had the opportunity to visit some wonderful places. There is so much more I would like to see, so I would love to hear from you. Here are my list of top ten places, with a few others noted at the bottom. By omission, you will likely guess where I have not been, as some choices would be obvious inclusions.

  • San Francisco – a city worth the travel and cost. It is so scenic and quaint, plus it offers access to wine country, Muir Woods and the Monterey coast.
  • Montreal – a city which offers a blend of French and English cultures and beautiful scenery. It is a great walking city and has wonderfully designed churches. Check it out during the Jazz Festival in the summer.
  • New Orleans – a vibrant, eclectic place with great music and food. Avoid the hot summer if you can, but do go. Also, indulge a tour to the Bayou to get a sense of the geography and fragility of the place.
  • London – a favorite city because of the cosmopolitan culture. It is a great walking city with numerous parks, pubs and historical places. Take in the theater while there, as well. Plus, it is a great launching pad for a journeys to France, Ireland, Scandinavia, etc.
  • Dublin – another great walking city, but ladies beware of heels on some of the cobblestone streets in Old Dublin. Much to see there in terms of history, pubs, etc., plus it is great place to view the rest of Ireland from.
  • New York – a must see for all, but you have to expect crowds. Also, a great walking city and there is so much to offer in theater, restaurants, shopping and sports.
  • Washington – I think this city is highly underrated as a place to visit, as there is so much to see and do. I always feel worn out from walking, but there is so much more to see and appreciate from the memorials to the museums to the zoo and restaurants.
  • Chicago – I have only been on business, but I love Chicago. It has a vibrance to it and is not as crowded as New York. Plus, the vistas of the lake are wonderful. It is a great place to fly into for a few days. Check out Lawry’s and Second City.
  • Toronto – Is a lot like Chicago with its lake venue. I wish I could have spent more time there, but it is not inexpensive. There are many things to do in close proximity be it the aquarium, Skydome, Second City, restaurants, sports, etc.
  • Cannes – I was able to go to a business conference here and what a trip. It is beautiful and has so much to offer in food (the right way over lengthy meals), shopping and casinos, if that is your cup of tea. My best memory is our group having dinner up in the hills overlooking the city and the meal lasting over three hours, leading to wonderful conversations.

Other cities I would give high marks to are Boston, Savannah, Charleston, Ottawa, Miami and Seattle. I would love to tour the northwest and check out Vancouver and set off for Paris, Florence, Frankfurt, Amsterdam, Sydney, Hong Kong, etc.

Let me know some of your favorites. Or, please reinforce or share concerns of some of those above.

The Pope is Catholic

Today, Donald Trump held a press conference and announced “I am here to say without a doubt, the Pope is Catholic. Believe me.” He went on to say, “I blame Crooked Hillary Clinton for telling everyone he was a Protestant. No one, not even the Bishops, not even the Cardinals know more about Catholicism than I do.”

He went on to explain that he is not a fan of this Pope as he believes climate change is a real problem. “We all know climate change is a hoax invented by the Chinese to steal our jobs.” Plus, he said the Pope worries about the poor too much. If they are losing their jobs or are unable to pay bills due to my stiffing them due to bankruptcies and cash management issues, then “that is their problem,” said Trump. He went on to say, “I am businessman,” to justify his looking out only for his interests.

He also said he doesn’t like this Pope because he says we should not be building walls, we should be building bridges. “We will build the biggest wall and get Mexico to pay for it. They are all rapists and criminals,” said Trump.

Trump said he was not a big fan of the Pope washing the feet of a Muslim. “Can you believe the head guy would wash the feet of a Muslim?” he asked. Trump went on to ask, “Can you believe this guy does not want to live in luxury and chooses to live in a smaller apartment? What kind of leader wants to turn his back on luxury which exhibits true power? I am rich. It is OK for me to show it.”

Note to Readers: The first and last paragraphs use fictitious quotes, while the middle paragraphs use paraphrased quotes from actual things the candidate has said about these issues in his history.

 

If it looks like a duck…

After a quite detailed investigation by David Fahrenthold of The Washington Post, several questions have been raised about The Trump Foundation. Unfortunately, we need to spend more time on these questions than the story is being given in short news cycles by main stream media.

I want to set aside the fact that Trump has not made recent contributions of his own money and likes to use other people’s money, while taking credit and accolades for the Foundation’s donations. I also want to set aside what the news is focusing most on and that is the buying of a portrait for personal use, which is illegal, if true.

What I want to focus on is the $25,000 donation made to the political campaign of the Florida Attorney General. The donation was received four days after an article appeared in a Florida newspaper revealing the Florida AG was considering charges against Trump University. After the timing of the donation, no charges were brought against Trump University. It should be noted there are three outstanding class action lawsuits against Trump University for alleged misrepresentation that began before the Trump campaign, which will continue whether he wins or loses the election. I guess the Florida claimants are not worthy of helping.

The AG denies this donation was buying influence as has the Trump campaign. Trump has admitted (after the investigation pointed it out) that the political donation from his Foundation was illegal and has made restitution, but there is more to it than that.

First, the donation was incorrectly noted on the Trump Foundation tax return as being made to a non-political group, which would have made it legitimate, if true. The campaign says this was an administrative error. Yet, it seems too coincidental that a later admitted illegal donation was incorrectly noted as a donation to a legitimate non-profit entity on the tax return.

Second, Trump’s son said his father intended to make that donation from his own funds and he signs a lot of checks, so it slipped through the cracks. Since Trump likes to use other people’s money, I have a hard time with that, but let’s set that aside for the important issue.

To me, the heart of the matter is the timing of a $25,000 donation to the Florida AG. Irrespective of its source, Trump sent a check to the AG at the time she was considering charges against Trump University. It has been noted while the check arrived four days after the article appeared, it was dated before the date of the article. I would not be surprised by gamesmanship, be it his backdating the check or being apprised of the forthcoming article or consideration of charges. I have no proof of this, but suggest that more investigation is at least warranted.

Yet, the AG’s decision to not press charges was made after the receipt of the check. Plus, Trump has bragged in debates, speeches and on the campaign trail about his buying influence with political donations, yet he denies it was done here.

Well, let me just say what I believe to be true, without proof, but on the basis of the above and his self-professed nature. If it looks like a duck, swims like a duck, and quacks like a duck, it probably is a duck.

The Imperfect Candidate and Some Added Perspective

My blogging friend Gronda Morin is a self-proclaimed RINO who does a highly commendable job of research and rational thinking as she writes her blog posts on issues of the day. Like a few other bloggers who are more independent minded, she covers issues better than many so-called news outlets and provides well-grounded opinions rather than being a homer for a political party.

As an Independent voter and former Republican and Democrat, I appreciate her research on policy issues and candidates. Like me, she is supporting former Senator and Secretary of State Hillary Clinton. A good example of her research is the following piece based mostly on the article posted on June 13, 2016 by Michael Arnovitz of the Policy blog, called “Thinking About Hillary — A Plea for Reason.” 

The gist of this piece is Clinton is far from perfect, but her opposition is running against a well crafted caricature that has been built piece by piece over time. Yet, a key data based component notes that her relative popularity rises while she is doing the job like Senator or Secretary of State and falls when she is running for office. I think this speaks volumes about her as she is a doer and knows the issues, but when campaigning the caricature becomes the opposing candidate not the person running.

I would encourage all voters to read this piece. I would especially encourage all voters who are unsure or not comfortable with their choice to read this piece. You may not agree with its conclusions nor with Gronda and me, but I do believe you will walk away with added perspective on the campaign. It won’t make her perfect, but it may help you understand her better and the obstacles she faces.

Michael Arnovitz’s Defense Of Hillary Clinton