Please contact your Senators to support the Corker Tariff Bill

Senator Bob Corker (R) has posed a bill to assume Congressional governance over tariffs the President is imposing on allies as a matter of national security. Ironically, harming our relationships with allies makes us less safer, not more. It also makes us untrustworthy.

If you agree with Senator Corker, I encourage you to send a letter to your Senator and Congressperson. Here is a sample to modify as you see fit.

“Senator (or Congressperson), please support Senator Corker’s efforts to have Congress govern all tariffs. My long time fear that our President would cede our global leadership role is coming to fruition. Considering the introduction of tariffs on China is understandable, but doing so brazenly on our allies is just poor form. The tariffs, if not altered, will back fire on the US, but the worst part is we have made the US less trustworthy and unreliable.

Please rein in this President who has oversimplified and misused data to strong arm our friends. His belligerence is not helpful and demeans the office he holds. He also fails to consider the number of foreign companies who make things here – BMW, Doosan, Nissan, Mercedes, Hyundai, Toyota, Michelin, Fiat-Chrysler, Husqvarna, etc. Two of these companies are German, two are South Korean, two are Japanese, one is French, one is Italian and one is Swedish. This is what a global economy looks like.

We have trade deficits as we are a consumer economy moreso than others. Plus, the President is not factoring in the investments made in US Treasuries and buying of services. While he cited a deficit with Canada, we actually have a surplus, with these factored in.

Thanks for your consideration.”

 

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Media please focus on the big issues

With a man occupying the White House who has hard time with truth, civility, history and criticism, there is a bounty of things the media could focus on. And, that is part of the problem. I look at various news feeds and sources and see too many pedestrian foibles that get discussed. Yet, the countless criticisms dull our focus on the more important issues.

My concerns are several, so let me highlight those areas:

– we are borrowing from our future to make a long performing economy a little better, doing the opposite of what is needed to limit our debt from increasing from $21 to $33 trillion by 2027.
– we have ignored our allies and reasonable voices in the US to pull out of various multiparty agreements hurting trade, environment and security.
– we have pulled back several regulations making it easier for industries to pollute and ignoring the federal government’s role in fighting climate change.
– we have blamed immigration for a host of problems and focus on remedies that won’t help people or solve problems.
– we have held up the constitution as sacrosanct, while ignoring the sections on protecting the rights of all citizens, protecting the right and importance of the media and ignoring the clearly defined roles of the three branches of government. It is of vital importance to respect the judiciary’s pursuit of truth, even if the President does not like it.
– we have continued down a path which ignores truths and facts tolerating a man who makes more than a few decisions off misinformation and even disinformation. Governing well is hard enough when we use real facts, it is nigh impossible when we make things up.

Of course, there are other issues, but I attempted to group several concerns into larger categories. In closing, please remember these three cautions – we cannot shrink to greatness, we cannot continue to pee in our global swimming pool, and we must respect the rights and opinions of all people, not just people who agree with you or compliment you.

Thoughts for Thursday

Here are a few random thoughts on a rainy Thursday, with more rain to come in the days ahead.

A retired ambassador said recently, the US strength is more than its military, it is its relationships with allies. What concerns me is we are devaluing our allied relationships. This is echoed by the European Union Chairman Dean Tusk. Tusk said the EU must be more united than ever before to deal with what he called Trump’s “capricious assertiveness”. My question is this how we want to be viewed by our friends?

Another retired ambassador to Israel said while he agreed with the move of the US embassy to Jerusalem, the US administration made two mistakes. It should have been announced in the context of moving toward a two state solution. In essence, the US placed little obligation on Israel for this move. Also, celebrating the opening on the anniversary of Israel is an insult to Palestinians. This date is not viewed favorably, so the celebration rubbed salt in a wound.

Assuming the role of ambassador for the disenfranchised in the US, a huge opportunity missed occurred during the rushed tax bill which hugely favored companies and the wealthy. I favored some relief on the corporate tax rate, but we went way too far and are negatively impacting our huge and growing debt. The additional opportunity missed I am referencing is not imposing a requirement on companies to provide raises. One way of doing this would have been a concurrent increase in the US minimum wage moving it from $7.25 to a living wage of above $10 per hour. Token one-time bonuses are actually the barest minimum of what could be done with an annual tax break – how about a raise instead? More income to people in need is accretive to the economy.

Finally, I have seen footage of conservative news sources highlighting Venezuela’s problems as an indictment of socialism. While I am a capitalist, I also recognize our country is a mixture of both. Social Security, Medicare, Medicaid, unemployment benefits, and bankruptcy laws are all forms of socialism. We also have other restrictions to prevent unfettered capitalism. Venezuela’s problems are due to corruption and mismanagement that can be traced even back to the popular Chavez. His successor, Maduro, has shown a level of incompetence that is quite visible to all.

That is all for this Thursday. Please share your thoughts.

This zero-sum discourse needs to stop

What does zero-sum discourse mean? It means framing topics in terms of who wins and who loses. I fault politicians, pundits and reporters for this mindset. This mindset preceded the current White House incumbent, but he views most everything through a very short-term transactional lens. Did I win?

The dilemma in discussing who wins and loses on actions, speeches or tweets is it takes the focus away from the issues. Does this decision help or hurt the people, environment or region?

I heard a news discussion on whether the US pulling out of the Iran nuclear deal helps or hurts Trump’s image? That is the wrong question among many better questions. Does it make the US safer? Does it make the world safer? Are we harming our relationships with our allies? Are we making a fact based decision as other leaders are questioning the veracity of this decision? And, so on.

Whether it is healthcare, debt, taxes, environment, financial protection, etc., I do not care who wins or loses politically. When people care too much about winning or losing, I can tell you who gets screwed – it is the people they represent.

Americans want Congress to address healthcare, with the majority saying to fix Obamacare. Instead, the President and leaders in Congress have sabotaged it over the past three years making premiums even higher. They want to see it politically fail while screwing American people.

I am tired of the lack of collaboration. I am tired of the abuse of factual information. And, I am tired of this zero-sum discourse. To be frank, our leaders need to stop trying to keep their job and start doing their job.

A couple of tax truths get revealed

Long before the Tax Plan was passed in December, I have shared my concern about our runaway debt problem. So, I am none to thrilled by a Tax Plan that will make it worse. Yet, that is not my only concern. While I was all for some tax relief on corporations to encourage the repatriation of overseas earnings, Congress and the President went much too deep.

Their stated goal was to fuel even more growth in the economy which was already doing pretty well for a long time – over 8+ years of growth – which is now the second longest growth period in our history. In essence, we borrowed from our future to improve on something that was percolating at a pretty good clip.

Yet, while this was a stated goal, I said then and repeat now, that may have been oversold. My fear is by giving money to corporations with no requirement, they would likely use it to benefit their EPS using a fairly expedient approach – they would buy back shares from the open market. Companies that cannot figure out how to grow earnings, can easily reduce the outstanding shares in the denominator through buy backs. I learned many years ago, share buy backs are usually a sign of weakness. Companies do this to meet EPS targets to pay bonuses. Board members do not complain as they may be doing the same thing at their own companies.

But, don’t take my word for this concern. In an article in Reuters this week, “Republican U.S. Senator Marco Rubio, in a move that may undercut his party’s message about the recent tax overhaul ahead of the 2018 midterm elections, told the Economist magazine there is ‘no evidence whatsoever’ the law significantly helped American workers.

‘There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,’ Rubio said in the interview published Thursday.

In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.’”

Per an article in March by CNN Money reporter Matt Egan, “Buy backs have exploded in 2018 thanks to windfall from the Republican tax law. American companies including Wells Fargo (WFC) and Cisco (CSCO) have showered Wall Street with $214 billion of stock buy back announcements so far this year, according to research firm TrimTabs.

But critics argue Corporate America’s fascination with stock buy backs has come at a real cost to American workers. Instead of focusing on short-term rewards for shareholders, they say companies should make long-term investments by retraining workers, ramping up benefits and boosting wages.

Stock buybacks have been a prime mode of both concentrating income among the richest households and eroding middle-class employment opportunities,‘ said William Lazonick, a professor at the University of Massachusetts Lowell who has studied the impact of stock buybacks.”

In my view, it would not be surprising to see some additional growth in our economy, but it is projected to be much less than Congress and the President have touted. What is throwing even more water on projected growth is the President’s announced tariffs. This has thrown global markets in a state of disarray and companies do not like uncertainty. If they don’t know if terms will be favorable, they will choose more cautious roads which lead to less but more predictable profits.

This uncertainty is already showing up in the capital markets. What frightens me is we sold our future with more debt while not even addressing the existing debt. And, for what purpose is to be determined.

That nagging math problem

Dwarfed by other news yesterday, the Congressional Budget Office (CBO) updated their budget projections reflecting the new tax law and spending plan. Over the next ten years, the just over $21 trillion debt is expected to increase by $11.7 trillion bringing it to about $33 trillion. Before these two changes, it was expected to increase to about $31 trillion.

The CBO also said the deficit should rise to $804 billion by 2018 fiscal year end. Last year it was $665 billion. Further, the annual deficit should pass $1 trillion by 2020 and stay there.

There are many in Congress today who have screamed bloody murder in the past over rising debt and got elected under the banner of the Tea Party. I have seen footage of members who called this a crisis when it was only $8 trillion and then $13 trillion. They were right then, but now debt and deficit don’t seem to matter as many voted for a law to increase it.

I have seen some recent discussion about the need for a balanced budget amendment. To be frank, that won’t do. We need more revenue than expenses. The tax law passed in December is projected to increase the debt by $1.5 trillion, but Congress knew that then and still passed it, even many of these Tea Partiers.

I said this before, but I believe the tax law passing is extremely poor stewardship, even malfeasance. We are borrowing from our future to try to make an economy, that was in a 103 consecutive month growth period with seven consecutive years of 2 million plus job growth, even better.

To be frank, we cannot cut our way out of this problem. The math will not work. We must also have more revenue than we had before the tax cut. At some point, a future Congress and President will get all the flak for abruptly addressing this problem. Yet, they will be the better stewards, far better than the current President, Congress and their predecessors have been.

Bill Clinton takes a lot of heat for his womanizing, rightfully so, but he handed a surplus budget and smaller debt to George W. Bush. Bush went against the advice of his Treasury Secretary and passed a tax cut and then we invaded two countries draining our budget. And, my biggest criticism of Barack Obama is he shelved the Simpson-Bowles Deficit Reduction Committee report failing to use it as very good starting point for change.

Folks, like climate change, this math problem is not going away. We must address our debt now or it will be much more severe later. And, if people think it does not matter, that country we are imposing tariffs on owns a lot of our treasury bonds, bills and notes. They have floated the idea of stop buying them even before the tariff war. That also makes it a security risk as well.

Monday, Monday again

Using a wonderful song from The Mamas and Papas, happy Monday everyone. Our friend Jill enjoys (and eventually laments) it when I place these songs in her head.

A few random thoughts for the start of the week are as follows:

Facebook is apologizing and saying they will do better at protecting your information. Yet, what they fail to tell you is sharing your information is their business model. Unless they are prepared to go to a subscription model, do not expect any major changes. Tailored ads based on your data and search history is revenue.

The biggest news from the Stormy Daniels’ revelations is not the tryst with Donald Trump. It is the illegal election contribution made by the attorney who has boxed himself in with his own revelations. By admitting he did not get reimbursed by Trump, he blocked a possible exit ramp that may have mitigated his guilt. I will say the creepiest thing about the Daniels’ revelation is when she said Trump told her she reminded him of his daughter. Ick.

Trump keeps saying articles about things he will be doing are fake news. Yet, when it happens anyway, does that make it fake? Mind you, he has delayed decisions mentioned in these articles, so as to punish the media with this fake brand. But, when he eventually fires the person or signs a wretched executive order, it verifies the earlier assertion does it not? He did fire Tillerson, McMaster, e.g. even though he said he would not do so after the press reported it.

With the passing of the US spending bill on top of the tax law change, it is apparent that Congress and the President do not care about resolving our deficit and debt issues. These laws make them worse rather than better. It should be pointed out that China is talking about buying fewer US Treasuries bills, notes and bonds. That is how we get cash and is a trade threat the US cannot reciprocate.

A final shout out to the teens who are advocating for better gun governance. You are an inspiration. The lawmakers need to pay attention as they may have awakened a sleeping giant.