Does Pence Have Coronavirus Already-- And Who Has He Spread It To In The White House?

CoronavirusCzar Mike Pence by Nancy Ohanian

One in 10 members of the Iranian parliament (the Majlis) has tested positive for coronavirus. Yesterday, a close Pelosi ally in Congress told me she;'s considering adjourning Congress for "a while." The feeling in the non-denying House is that members of Congress are out in every corner of the country shaking hands and then coming back to Washington in close quarters with each other-- and then go blackout to their districts to shake hands with more people. Most Americans understand by now that Trump can be counted on to make every possible wrong decision at every turn-- and that he never appoints any good people to any jobs. And that includes, of course, battling coronavirus. Maybe Jared would have been a better pick than Pence for this one too, who, Trump said, was chosen because he doesn't have anything else to do. When I noticed on Monday, at AIPAC, that Paul Begala predicted that Trump is "gonna dump Mike Pence" for Nikki Haley on July 16-- presumably the day Bernie makes his acceptance speech-- I was, to put it mildly, dubious. But Begala went on that the excuse would be Pence's failure to handle the coronavirus, expected to be a catastrophic pandemic by then-- adequately.

"This is not a prediction. It’s a certainty. On Thursday, July 16-- that’s the date the Democrat gives his or her acceptance address-- on that day, to interrupt that narrative, Donald Trump will call a press conference at Mar-a-Lago. He’s going to dump Mike Pence and put Nikki Haley on the ticket to try to get those suburban moms. You watch. Guaranteed," Begala said. “Trump put Pence in charge of coronavirus to throw him under the bus."

Or... maybe not. Pence will be 61 in June. People over 50 who contract coronavirus have an extraordinary chance of dying, whereas people under 50 usually seem to weather it pretty well. And Pence may well already be carrying coronavirus. [WARNING to all DWT readers: do not get anywhere near Mike Pence, let alone shake hands with him!] Why?

Last Friday Pence was at a fundraiser in Longboat Key (Sarasota, Florida) at the home of Congressman Vern Buchanan, where he shook hands and posed for photos with a cadet from the Sarasota Military Academy who is now under quarantine after his mother-- who is also under quarantine-- come in contact with a patient who tested positive for coronavirus.

Meanwhile, the Washington Post reported that "The U.S. death toll from the coronavirus rose to six on Monday, and patients were being treated in at least 15 states, deepening fears about the outbreak's rapid spread and the medical, psychological and economic toll it will exact on the United States. Four deaths announced Monday and two others this weekend all occurred in Washington state, the center of the nation’s most serious outbreak. Eight of the state’s 18 cases, as well as four of the deaths, are linked to the Life Care Center nursing home in Kirkland, Wash., and at least 50 other residents and staff members have reported coronavirus-like symptoms. King County leaders declared a state of emergency, and health officials said they are trying to figure out how far the outbreak has expanded into surrounding counties. Nationwide, the number of cases topped 100, and U.S. officials used increasingly dire language, even as they sought to push back against waves of panic and misinformation online. 'We know there will be more cases,' Vice President Pence said at a White House news conference. 'Now we’re focused on mitigation of the spread as well as treatment of people that are affected.' Trump administration officials stressed Monday that the risk posed to the public by the coronavirus remains low but cautioned the outbreak could change course as the disease spreads through person-to-person contact."

Other states with confirmed coronavirus patients include Arizona, California, Florida, Georgia, Illinois, Massachusetts, Nebraska, New Hampshire, New York, Oregon, Rhode Island, Texas, Utah and Wisconsin. It's unlikely a vaccine will be available before 2022, but Trump noted on Monday that "the market’s up today... our country’s very strong economically." He then started whining about the Federal Reserve not doing enough (to prop up the economy and his case for reelection). That was a typical bear trap and Tuesday the Dow Jones was down over 786 points by the end of the day-- even after the Fed announced a half point interest rate cut. (Remember, they don't have too many half points left to cut, largely due to Trump's personal, self-serving agenda-- and the markets know it.)

Nationwide, signs of spreading panic included the stockpiling of food, sanitizers and cleaning supplies.

At the Trader Joe’s in Mountain View, Calif., the freezer sections were empty of pizza and most ready-made meals. There was no pasta or rice. Across town at the Costco near Google’s headquarters, customers climbed shelves to reach groceries, and lines snaked through the aisles.

A Whole Foods employee in Los Altos, Calif., said the store was out of “pasta, beans, frozen vegetables, hand sanitizer, toilet paper, paper towels. “I’ve worked here 10 years, and I’ve never seen anything like this,” she said.

Health officials continued to beg Americans to stop buying masks and save them for health workers who truly need them. On cable news, U.S. Surgeon General Jerome Adams argued that consumers who buy masks “actually can increase the spread of coronavirus” because people who wear them improperly tend to fidget with their masks and touch their faces repeatedly.

Online, Amazon shoppers in Seattle, San Francisco, New York and Washington also ran into problems, with the company warning customers that its same-day grocery-delivery service “may be limited” amid reports of consumers stocking up.

...Meanwhile, worsening situations in various countries overseas offered possible signs of what may lie ahead for the United States.

Schools across Japan mostly closed their doors Monday in response to a controversial request by Prime Minister Shinzo Abe last week to make a concerted attempt to slow the spread of the virus.

South Korea said it would extend its school closures by two weeks to March 23, its education minister announced.

Japanese officials studying the outbreak on the Diamond Princess cruise ship said more than half of those infected-- nealy 400 out of 705 people who tested positive-- showed no symptoms, underscoring just how difficult the virus is to detect and how many people may have contracted it without knowing it. Some would never have been tested unless they had been onboard the ship, they said. While many people appear able to shrug off the virus, it clearly is devastating to the elderly and people with underlying health problems. At least seven of the cruise ship passengers died.

The European Union’s internal market commissioner said Monday the coronavirus has led to about $1.1 billion in losses per month for the European tourism industry since the start of 2020. And British Airways on Monday said it was canceling hundreds of flights-- including a dozen between London and New York-- in response to the coronavirus outbreak.

An adviser to Iran’s supreme leader died after contracting the coronavirus, state media reported Monday. Iraq and Egypt confirmed more cases, many of them linked to Iran.

Senegal confirmed its first case, marking the second case found in sub-Saharan Africa. Global health officials have expressed strong worries that the epidemic and death toll could grow rapidly if it reaches areas such as Africa, which in many places lacks the resources and the health infrastructure to combat the virus. Nigeria, the continent’s most populous country and biggest economy, announced last week that doctors had diagnosed the illness in a businessman from Italy.

Yesterday, The Guardian reported that "Pence’s public health record is disastrous. As the governor of Indiana, Pence was responsible for the largest HIV outbreak in state history. He slashed public health spending, triggering the closure of HIV testing sites. Against the advice of scientists, he banned needle exchanges, causing transmissions to spread due to increased needle sharing. Pence has also downplayed the link between smoking and cancer. 'Despite the hysteria from the political class and the media,' he once wrote in an opinion piece, 'smoking doesn’t kill.' In fact, research shows that as high as two out of three smokers die from a smoking-related illness. Pence’s track record should disqualify him for any leadership positions in public health... Pence’s appointment follows a track record of the administration prioritizing politics over scientific expertise. Trump has appointed fossil fuel lobbyists to lead the EPA, climate deniers to head up Nasa and the Council on Environmental Quality, Dow executives to USDA leadership, and a chemical industry insider to run the EPA’s toxic chemicals program. These appointments have eroded public trust and shifted the priorities of these agencies from saving lives to special interests... Now is the time for honest and humble governance. Viruses don’t discriminate between liberals and conservatives. Dedicated and talented government scientists are working hard to protect us all. We should allow them the freedom to get on with their important jobs."

One In Five American CEOs Are Psychopaths-- So Not Just Trump

I don't know CNBC lives on my TV and I rarely read their stuff when I'm looking for information. That said, yesterday I found two pieces of theirs-- somewhat related-- worth passing on. Why don't we start with a specific piece of news-- Wall Street gives thumbs down on both Trump's FED picks-- and close with something a bit more general. The 48-person panel of fund managers, economists and strategists who took CNBC's new Fed Survey over the weekend prefer that the Senate not confirm either Stephen Moore (60%) or Herman Cain (53%). The panel considered both "too political" and "not qualified."

Kathy Bostjancic, chief U.S. Financial Market Economist at Oxford Economics: "Both Moore and Cain are highly unconventional and politically-biased choices and, if confirmed to the board, would be very disruptive at a time when monetary policy is at an important crossroads.

After announcing he planned to nominate Moore and Cain to the Fed, Trump on Friday substantially raised the ante in his comments and criticism of the Federal Reserve, not only calling for rate cuts but also advocating for the first time new quantitative easing. The Fed used so-called QE in the wake of the financial crisis to drive down interest and stimulate the economy, buying bonds and mortgages.

Not a single respondent agreed with the president’s call for new QE and just 9% think the Fed should cut rates now.

A 47% plurality of respondents believes the nominations along with the president’s critical remarks about the Fed are “reducing the central bank’s independence” and they think that could have implications for markets and the economy.

“Stacking the Fed with partisan hacks would alter how the market views the Fed’s decisions even if two appointments don’t change the Fed’s decision making,″ said Diane Swonk, chief economist at Grant Thornton. “Over time, the loss in credibility will mount.”

The second piece comes from Tomas Chamorro-Premuzic and it seeks to explain why 20% of CEOs are psychopaths or, at least, have psychopathic tendencies. Think of the psychopath-- no need to talk about "tendencies" here-- who runs the Trump Organization.

Narcissism involves an unrealistic sense of grandiosity and superiority, manifested in the form of vanity, self-admiration and delusions of talent. Here are the main characteristics of narcissistic and toxic bosses:

1. They often crave validation and recognition from others. This is primarily because their self-esteem is high but fragile. Bosses who constantly show off are probably desperate for others’ admiration.

2. They tend to be self-centered. This means they’re generally less interested in others and have deficits in empathy. For this reason, they are rarely found displaying any genuine consideration for people other than themselves.

3. They have high levels of entitlement. Narcissists commonly behave as if they deserve certain privileges or enjoy higher status than their peers enjoy.

As I highlight in my most recent book, Why Do So Many Incompetent Men Become Leaders? (And How to Fix It), many wildly celebrated character traits, such as courage and risk-taking, often coexist with psychopathic tendencies.

...By the same token, psychopathic tendencies often co-exist with entrepreneurial traits. This explains why there are so many famous cases of self-made billionaires-- from Bernie Madoff and Jeff Skilling to Steve Jobs and Elon Musk-- whose disruptive personalities made them as unemployable as innovative.

Jobs got fired from his own company and displayed clear patterns of low empathy and antisocial behavior: Parking in the disabled parking spots and bullying and intimidating his employees. Musk’s narcissistic side has also been manifested-- rather often-- in his combative rants with investors, the media and his employees, as well as his confrontational and erratic social media presence.

But it’s not all bad. Jobs and Musk undeniably have talent for entrepreneurship, defined as the ability to translate original and useful ideas into practical innovations.

That can’t be said for every entrepreneur, though. While Elizabeth Holmes lost her “billionaire” title, she styled herself as the Steve Jobs of health care and was clearly ruthless in deceiving investors. Instead of bringing an innovative product to the market, she was selling nothing but a fairy tale.

To some degree, all successful entrepreneurs have problems with authority, which is why they are so eager to demolish the status quo and replace it with something else.

To be sure, too much psychopathy will predispose someone to crime and prison rather than Apple or Amazon. But at the other extreme of the continuum, people who are so conforming and eager to please would much rather follow established rules and remain “good employees” rather than be disruptive leaders.

So while a certain degree of nonconformity and unconventionality is needed to drive innovation and entrepreneurship, any leader will need to have a minimum level of integrity, empathy and altruism to be able to connect with and focus on the well-being of their teams, rather than on advancing their own personal agenda.

It is this range of pro-social and ethical traits that can turn even contrarian and combative personalities into a catalyst for good in society: Replacing the status quo with a better version of progress.

Can Trump Turn The Fed Into A Bastion Of Trumpnomics-- Enough To Make The Coming Recession Into A Depression?

When Trump nominated crackpot Stephen Moore for a spot on the Fed, I was shocked. That's even a crazy move for Trump. What was I missing? I asked the smartest economist I know, Stephanie Kelton. All she would say is that "It’s not an inspired choice, to say the least. Paul McCulley would have been an inspired choice." Conservative economist Greg Mankiw was considerably more forthcoming on his thoughts about the nomination.

Mankiw isn't famous because he teaches economics at Harvard, though he does. He's famous because he worked for both Bush-- for whom he served as chairman of the Council of Economic Advisors-- and for Mitt Romney. In 2011, while he was advising Romney and teaching at Harvard, dozens of students walked out of his lecture and went to a Occupy Wall Street demonstration, handing him an open letter on the way out:

Today, we are walking out of your class, Economics 10, in order to express our discontent with the bias inherent in this introductory economics course. We are deeply concerned about the way that this bias affects students, the University, and our greater society.

As Harvard undergraduates, we enrolled in Economics 10 hoping to gain a broad and introductory foundation of economic theory that would assist us in our various intellectual pursuits and diverse disciplines, which range from Economics, to Government, to Environmental Sciences and Public Policy, and beyond. Instead, we found a course that espouses a specific-- and limited-- view of economics that we believe perpetuates problematic and inefficient systems of economic inequality in our society today.

A legitimate academic study of economics must include a critical discussion of both the benefits and flaws of different economic simplifying models. As your class does not include primary sources and rarely features articles from academic journals, we have very little access to alternative approaches to economics. There is no justification for presenting Adam Smith’s economic theories as more fundamental or basic than, for example, Keynesian theory.

Care in presenting an unbiased perspective on economics is particularly important for an introductory course of 700 students that nominally provides a sound foundation for further study in economics. Many Harvard students do not have the ability to opt out of Economics 10. This class is required for Economics and Environmental Science and Public Policy concentrators, while Social Studies concentrators must take an introductory economics course-- and the only other eligible class, Professor Steven Margolin’s class Critical Perspectives on Economics, is only offered every other year (and not this year). Many other students simply desire an analytic understanding of economics as part of a quality liberal arts education. Furthermore, Economics 10 makes it difficult for subsequent economics courses to teach effectively as it offers only one heavily skewed perspective rather than a solid grounding on which other courses can expand. Students should not be expected to avoid this class-- or the whole discipline of economics-- as a method of expressing discontent.

Harvard graduates play major roles in the financial institutions and in shaping public policy around the world. If Harvard fails to equip its students with a broad and critical understanding of economics, their actions are likely to harm the global financial system. The last five years of economic turmoil have been proof enough of this.

We are walking out today to join a Boston-wide march protesting the corporatization of higher education as part of the global Occupy movement. Since the biased nature of Economics 10 contributes to and symbolizes the increasing economic inequality in America, we are walking out of your class today both to protest your inadequate discussion of basic economic theory and to lend our support to a movement that is changing American discourse on economic injustice. Professor Mankiw, we ask that you take our concerns and our walk-out seriously.

His fame increased when he announced on CNBC that he wouldn't vote for Trump in 2016. On his blog he explained in more detail why he wouldn't vote for the Republican candidate for president:

I have Republican friends who think that things couldn't be worse than doubling down on Obama policies under Hillary Clinton. And, like them, I am no fan of the left's agenda of large government and high taxes. But they are wrong: Things could be worse. And I fear they would be under Mr. Trump.

Mr. Trump has not laid out a coherent economic worldview, but one recurrent theme is hostility to a free and open system of international trade. From my perspective as an economics policy wonk, that by itself is disqualifying.

And then there are issues of temperament. I am not a psychologist, so I cannot figure out what Mr. Trump's personal demons are. But he does not show the admirable disposition that I saw in previous presidents and presidential candidates I have had the honor to work for.

I don't get the feeling he intends to vote for Trump in 2020 either. On Friday he wrote that the only good thing he credited Trump with, in his opinion, "making good appointments to the Fed.... Jay Powell, Rich Clarida, and Randy Quarles. Then today the president nominates Stephen Moore to be a Fed governor. Steve is a perfectly amiable guy, but he does not have the intellectual gravitas for this important job. If you doubt it, read his latest book Trumponomics (or my review of it). It is time for Senators to do their job. Mr. Moore should not be confirmed."

Moore wrote the universally panned book with Arthur Laffer and Mankiw's review for Foreign Affairs was titled Snake-Oil Economics-- The Bad Math Behind Trump’s Policies. Moore and Laffer, he wrote, presented their findings in the voice of "rah-rah partisans... who do not build their analysis on the foundation of professional consensus or serious studies from peer-reviewed journals. They deny that people who disagree with them may have some logical points and that there may be weaknesses in their own arguments. In their view, the world is simple, and the opposition is just wrong, wrong, wrong. Rah-rah partisans do not aim to persuade the undecided. They aim to rally the faithful." He feels that their "over-the-top enthusiasm" for Señor Trumpanzee's "sketchy economic agenda is not likely to convince anyone not already sporting a 'Make America Great Again' hat." 

Moore and Laffer served as economic advisers to Trump during his campaign and after he was elected president (along with Larry Kudlow, the current director of the National Economic Council, who wrote the book’s foreword). From this experience, Moore and Laffer apparently learned the importance of flattering the boss. In the first chapter alone, they tell us that Trump is a “gifted orator” who is always “dressed immaculately.” He is “shrewd,” “open-minded,” “no-nonsense,” and “bigger than life.” He is a “commonsense conservative” who welcomes “honest and fair-minded policy debates.” He is the “Mick Jagger of politics” with a contagious “enthusiasm and can-doism.”

The authors’ approach to policy is similarly bereft of nuance. In Chapter 3, they sum it up by proudly recounting what Moore told Trump about U.S. President Barack Obama during the campaign: “Donald, just look at all the things that Obama has done on the economy over the past eight years, and then do just the opposite.”

It is hard to imagine more simplistic, misguided advice. To be sure, Moore and Laffer can reasonably hold policy positions and political values to the right of those of Obama. (As someone who chaired the White House Council of Economic Advisers during the George W. Bush administration, so do I.) But the Obama administration was filled with prominent economic advisers who were well within the bounds of mainstream economics: Jason Furman, Austan Goolsbee, Alan Krueger, Christina Romer, and Lawrence Summers, to name but a few. It is not tenable to suggest that with all this talent, the administration made only wrong decisions, and that they were wrong simply because those who made them were Democrats.

The tribalism of Moore and Laffer’s approach stems primarily from their devotion to a single issue: the level of taxation. Obama pursued higher taxes, especially on higher-income households. His goal was to fund a federal government that was larger and more active than many Republicans would prefer and to use the tax system to “spread the wealth around,” as he famously told Joe Wurzelbacher, known as Joe the Plumber, a man he encountered at a campaign stop in Ohio in 2008. By contrast, Moore and Laffer want lower taxes, especially on businesses, which in their view would promote faster economic growth.

The debate over taxes reflects a classic, ongoing disagreement between the left and the right. In 1975, Arthur Okun, a Brookings economist and former adviser to President Lyndon Johnson, wrote a short book called Equality and Efficiency: The Big Tradeoff. Okun argued that by using taxes and transfers of wealth to equalize economic outcomes, the government distorts incentives-- or that, to put it metaphorically, the harder the government tries to ensure that the economic pie is cut into slices of a similar size, the smaller the pie becomes. Based on this argument, the main priority of the Democratic Party is to equalize the slices, whereas the main priority of the Republican Party is to grow the pie.

Yet Moore and Laffer aren’t willing to admit that making policy requires confronting such difficult tradeoffs. Laffer is famous for his eponymous curve, which shows that tax rates can reach levels high enough that cutting them would yield enough growth to actually increase tax revenue. In that scenario, the tradeoff between equality and efficiency vanishes. The government can cut taxes, increase growth, and use the greater tax revenue to help the less fortunate. Everyone is better off.

The Laffer curve is undeniable as a matter of economic theory. There is certainly some level of taxation at which cutting tax rates would be win-win. But few economists believe that tax rates in the United States have reached such heights in recent years; to the contrary, they are likely below the revenue-maximizing level. In practice, the big tradeoff between equality and efficiency just won’t go away.

Trumponomics is full of exhortations about the importance of economic growth. Why, Moore and Laffer ask, should Americans settle for the two percent growth that many economists have been projecting? Wouldn’t every problem be easier to solve with a more rapidly expanding economy? The book quotes Trump as claiming, when announcing his tax plan in December 2017, that it would not increase the budget deficit because it would raise growth rates to “three, or four, five, or even six percent.”

The authors offer no credible evidence that the tax changes passed will lead to such high growth. Most studies yield far more modest projections. The Congressional Budget Office estimates that the Trump tax cuts will increase growth rates by 0.2 percentage points per year over the first five years. A study by Robert Barro (a conservative economist at Harvard) and Furman (a liberal economist at Harvard) published in 2018 estimates that the tax bill will increase annual growth by 0.13 percentage points over a decade. And that is if the changes are made permanent. Barro and Furman estimate that as the legislation is written, with many of the provisions set to expire in 2025, it will increase annual growth by a mere 0.04 percentage points over ten years.

It is conceivable that standard economic models underestimate the impact of tax cuts on growth. A research paper by the economists Christina Romer and David Romer published in 2010 examined historical tax changes and found that they had larger effects on economic activity than standard models suggest. (It is worth noting that these two authors’ political leanings are left of center, so their findings are not the result of ideological taint.) One might reasonably argue that Trump’s tax cuts will increase growth over the next decade by as much as half a percentage point per year. But that is a long way from the one- to four-percentage-point boost that the president and his associates have bragged of, and that Moore and Laffer quote without explanation, caveat, or apology.

...Perhaps the most disappointing aspect of Trumponomics is the long list of crucial issues on which the authors are largely silent. They offer no cogent plans to deal with global climate change, the long-term fiscal imbalance from growing entitlement spending, or the increase in economic inequality that has occurred over the past half century. Many reasonable Republicans would support a tax on carbon emissions, for example. Such a policy would slow climate change by incentivizing the movement toward cleaner energy, as well as provide revenue that could be used to close the fiscal gap or to help those struggling at the bottom of the economic ladder.

Rather than suggesting coherent policies, Moore and Laffer seem to hope that a much more rapidly growing economy will provide the resources to address all these problems, and they seem to believe that this growth will follow ineluctably from the lower taxes and deregulation that lie at the heart of Trump’s agenda. It would be wonderful if that were possible. Maybe rah-rah partisans really believe it is. But more likely, it is just wishful thinking. Trump appears eager to avoid most of the economic problems facing the nation. By banking on so much growth from cutting taxes, Moore and Laffer are, in effect, giving him a pass and kicking the can down the road to a future leader more interested in confronting hard policy choices.

Are there enough Republicans in the Senate with enough good sense and courage to deny Moore his confirmation? I doubt it. In fact, it's probably more likely that Kyrsten Sinema and Joe Manchin vote to confirm that it is that more than one or two Republicans vote not to, even though some Republicans have been grumbling about Moore's column advocating that Trump fire Fed Chair Jay Powell (a Trump appointee who, like so many, Trump quickly soured on).

Trump In The White House Absolutely Predicts A Recession-- The Question Is Just How Soon

The Obama administration worked hard to turn the economy around after Trump inherited an economy that would have been a dream for any president. He immediately set out to sabotage it and, unfortunately, his policies are finally kicking in strongly enough to wreck everything that Obama did to right the economy Bush left him-- and us. But before we get into Trump's disastrous policies, one little note: his utter and complete lack of leadership abilities are working hand in hand with bad policy to bring down the economy. Take this insane tweet from yesterday announcing that the Treasury Department had slapped additional sanctions on North Korea and that just hours later Trump was countermanding them. How does something like that even happen? Was there a gnome working at Treasury and doing whatever he wanted to do with no supervision?

Worse yet, Trump announced that he is nominating another entirely unfit ideologue to a position where he will undoubtably harm everything he touches. Trumponomics author Stephen Moore, like Trump, a harsh critic of Trump-appointed Fed chair Jerome Powell, will soon be serving on the Fed. "Moore’s primary area of pseudo-expertise-- he is not an economist-- is fiscal policy," wrote Jonathan Chait. "He is a dedicated advocate of supply-side economics, relentlessly promoting his fanatical hatred of redistribution and belief that lower taxes for the rich can and will unleash wondrous prosperity. Like nearly all supply-siders, he has clung to this dogma in the face of repeated, spectacular failures."

OK, tuck all that away for a moment while we consider two dire reports from Bloomberg News Friday morning, on just after sunrise and one at 11AM. First was the announcement of a curve inversion, an event that usually signals a recession is on the horizon.

The Treasury yield curve inverted for the first time since the last crisis Friday, triggering the first reliable market signal of an impending recession and rate-cutting cycle.

The gap between the three-month and 10-year yields vanished as a surge of buying pushed the latter to a 14-month low of 2.416 percent. Inversion is considered a reliable harbinger of recession in the U.S., within roughly the next 18 months.

Demand for government bonds gained momentum Wednesday, when U.S. central bank policy makers lowered both their growth projections and their interest-rate outlook. The majority of officials now envisages no hikes this year, down from a median call of two at their December meeting. Traders took that dovish shift as their cue to dig into positions for a Fed easing cycle, pricing in a cut by the end of 2020 and a one-in-two chance of a reduction as soon as this year.

“It looks like the global slowdown worries have been confirmed and the market is beginning to price in Fed easing, potential recession down the road,” said Kathy Jones, chief fixed-income strategist at Charles Schwab & Co. “It’s clearly a sign that the market is worried about growth and moving into Treasuries from riskier asset classes.”

Too abstract? How about U.S. Posts Largest-Ever Monthly Budget Deficit in February? Will Trump call a market crash "fake news?" Largest monthly budget deficit ever-- key word "ever"-- seem like a big deal, no? And that duet deficit is obviously a result, at least in part, of falling tax revenues because of the catastrophic GOP tax bill of last year, and increased spending as Trump attempts, entirely unsuccessfully, to buy his way into some kind of popularity.

The budget gap widened to $234 billion in February, compared with a fiscal gap of $215.2 billion a year earlier. That gap surpassed the previous monthly record of $231.7 billion set seven years ago, according to data compiled by Bloomberg.

February’s shortfall helped push the deficit for the first five months of the government’s fiscal year to $544.2 billion, up almost 40 percent from the same period the previous year, the Treasury Department said in its monthly budget report Friday. The release was delayed a week by the government shutdown earlier this year.

Receipts dipped less than 1 percent to $1.3 trillion in the October-February period from the previous year, while spending accelerated 9 percent to $1.8 trillion.

The fiscal shortfall is widening following President Donald Trump’s $1.5 trillion tax-cuts package that’s weighing on receipts and raising concerns about the national debt load, which topped a record $22 trillion last month.

Federal Reserve Chairman Jerome Powell reiterated his concern over the government deficit in a press conference Wednesday, saying that the nation’s growing debt pile needs to be addressed. At the same time, there’s a shift among some economists-- led by proponents of Modern Monetary Theory-- on the dangers of a growing deficit, with low inflation and cheap borrowing costs suggesting there’s room for additional spending.

The Treasury data show tax receipts declined for both corporations and individuals in the five-month period, while revenue from customs duties almost doubled, boosted by income from tariffs imposed by the Trump administration.

The 2017 tax law slashed the corporate tax rate from 35 percent to 21 percent.

Corporations have so far this fiscal year paid $59.2 billion, compared to $73.5 billion in 2018, when the tax law was only partially in effect for some corporations. In 2017, however, the year before the law was enacted, corporations had paid $87.4 billion at this point in the year.

Individual income tax receipts dropped slightly from this point last year, but have risen compared to some years before the tax law. Despite the law cutting tax rates for most people, rising wages and lower unemployment have spurred higher tax revenue.

Now think again about Trump's newest appointment to the Fed. "Stephen Moore’s career as an economic analyst has been a decades-long continuous procession of error and hackery. It is not despite but precisely because of these errors that Moore now finds himself in the astonishing position of having been offered a position on the Federal Reserve board by President Trump," was how Chait put it. "[F]or all their extravagant ignorance, Moore’s beliefs on fiscal policy are actually more sophisticated and well-developed than his views on monetary policy. It is the latter that he would be in a position to influence as a Federal Reserve governor... While the internal workings of his mind remain a matter of speculation, I doubt he is consciously venal enough to tailor his thinking explicitly to partisan goals. Rather, Moore has extremely strong partisan instincts and extremely limited analytical skills. The combination results inevitably in the latter giving way to the former. He should not be permitted any position of serious responsibility, in government or anything else."

Ian Welsh suggests, "Maybe It Is Time To Stop Underestimating Trump?" -- and Steve Bannon too

Andy B. strikes again -- and note especially
the "Carol Foyer" fake-quote at the end

NEW YORK (The Borowitz Report) -- A once-prominent political career came to a shocking end on Friday as New Jersey Governor Chris Christie was arrested for keying the limo of President-elect Donald J. Trump.

The incident, which rocked political circles in Trenton and Washington, happened in full view of the midtown-Manhattan crowds outside of Trump Tower, where the vandalized limo had been parked.

“Suddenly, this guy broke through security, whipped out his keys, and made a gigantic gash along the side of the limo,” said Harland Dorrinson, a tourist from Missouri who witnessed the incident. “Police started wrestling him to the ground, and I was, like, ‘Holy crap, that’s Chris Christie.’ ”

Fellow-Republicans reacted to Christie’s arrest with sadness and sympathy. “This whole transition period has been tough on a lot of folks,” former Massachusetts governor Mitt Romney said.

Across New Jersey, residents like Carol Foyler, of Teaneck, said that they were shocked by their governor’s spectacular fall. “I never would have guessed that this would be the thing he’d go to jail for,” she said.

"Trump’s opposition will continue getting their asses handed to them if they keep assuming that he’s a boob, or that he can’t take good advice. He’s a very savvy operator, and the people he trusts most, Bannon and Kushner, are extraordinarily competent men who have proved their loyalty."

-- Ian Welsh, in "Maybe It Is Time To Stop
Underestimating Trump?" (Wednesday)

"Bannon, for all he is decried as a racist, is the person you want to win most of the Trump White House fights, at least if you care about ordinary people, because he’s the guy who wants ordinary Americans to do well, and he knows he needs Hispanics and Blacks to get jobs too. . . . Bannon is right that if the Trump White House can deliver for enough people, they get to rule DC and America for 50 years. . . .

"This is going to be a very interesting White House and administration, just because Trump does not have decided views on a lot of issues. Who wins the internal fights will determine the entire course of Trump’s presidency, and may well determine America’s (and the world’s) future for decades.

"Place your bets and don’t underestimate these people."

-- Ian, in "Don't Underestimate Steve Bannon" (Thursday)

by Ken

Okay, enough fun with Andy B. Now down to business, in the form of Ian Welsh's posts from the last two days, referenced above. The thing to do, really, would be just to encourage you to read the whole posts at the links, in chronological order -- Trump first, then Bannon. I'm going to blunder ahead anyway, but really Ian deserves to make his case(s) his own way (and while you're on his site, don't forget pondering kicking in some $$$ to help enable him to continue giving us his distinctive perspective on, you know, stuff.)

In recommending these posts, I realize that the first danger is readers assuming that Ian is endorsing whatever it is that President The Donald decides to do, failing to make the fairly obvious distinction between saying that the guy is extremely competent and usually gets what he goes after and saying that he's an agent of goodness. So let's go first to the "qualifier":

Trump just convinced Carrier to keep some manufacturing jobs in the US (by bribing them with tax cuts, it seems).  That sort of high profile personal intervention will be remembered, and has already said to his followers “I’m delivering for you”.

Trump is clearly a very flawed individual, with really questionable morals and ethics, but he isn’t incompetent by any useful definition of the word.  He may well wind up betraying his followers, certainly many of his cabinet picks are of deeply dubious individuals who favor policies which will hurt the working and middle classes.

But that doesn’t make him incompetent, that makes him -- a politician and a sleazy, but very good, salesman.

So what is it that this is qualifying?

I keep seeing people talking about how stupid Trump is.

It is certainly true that Trump is not book-smart.  He probably wouldn’t score well on an IQ test.

But by now, it should be clear, except to functional idiots, that Trump is very good at getting what he wants.

This is a man who shits into a gold toilet.  Who has slept with a succession of models.  Yeah, he’s a sleazy predator, but he gets what he wants.

He won the primary and the election. He won the election spending half as much money as Clinton did. Yes, she won the popular vote total: that’s irrelevant.  He won where he needed to win to get the Presidency.

He played the media like a maestro, getting a ton of coverage, of the subjects he wanted covered when he wanted them covered.

After making clear his feelings about Trump's principles and beliefs (whatever they are), Ian gets to the point I've already quoted above, which seems worth repeating:

Trump’s opposition will continue getting their asses handed to them if they keep assuming that he’s a boob, or that he can’t take good advice. He’s a very savvy operator, and the people he trusts most, Bannon and Kushner, are extraordinarily competent men who have proved their loyalty.

"What Trump doesn’t have," Ian writes, "is very firm policy opinions,"

and wonkish centrists and lefties think that makes him stupid, and that that type of stupid is the same thing as incompetent.

Trump stands a decent chance of juicing the economy even as he chops away at is remaining underpinnings through his tax cuts. If he does so, he will be re-elected.

I’d be careful betting against him.

AS TO THOSE "EXTRAORDINARILY COMPETENT
MEN WHO HAVE PROVED THEIR LOYALTY" --


Ian cautions: "Don't underestimate these people."

In yesterday's post Ian took a closer look at Steve Bannon, and what he sees there isn't, or isn't just, what most of us have been focusing on.

First I told you not to underestimate Trump (well, I’ve told you repeatedly), now I’m going to tell you not to underestimate Bannon, his chief strategist, rewarded for supporting him thru everything from Breitbart.  Here’s Bannon:

“The globalists gutted the American working class and created a middle class in Asia. The issue now is about Americans looking to not get fucked over. If we deliver we’ll get 60 percent of the white vote, and 40 percent of the black and Hispanic vote and we’ll govern for 50 years. That’s what the Democrats missed. They were talking to these people with companies with a $9 billion market cap employing nine people. It’s not reality. They lost sight of what the world is about.”

Pretty much. Now, it was not necessary to gut the American working class to create a middle class in Asia, there were win/win ways to alleviate poverty outside the developed world without fucking working class Europeans and Americans and so on over. But those ways were not possible under neoliberalism.

"That point is important," Ian says, "but irrelevant to what Bannon is saying."

The way the world economy was run completely fucked a lot of people in America, the EU, Canada, Australia and elsewhere and Bannon is right that if the Trump White House can deliver for enough people, they get to rule DC and America for 50 years, like the Dems did from 1932 to 1980 (yeah, there were Republicans, they governed as Democrats.)

If Ian is right about Bannon's agenda, and if he can persuade the boss to let him do it, there's a lot he can do which will be felt in a good way by voters, especially if he can take advantage of "easy money from the Fed."

Trump will get to replace most Fed governors, fairly soon, so he can certainly have a compliant Federal Reserve. Bear in mind that [following the 2008 economic meltdown] the Fed gave away trillions of dollars, and was giving away tens of billions a month for years.  That money is an available slush fund for anyone smart enough to use it to do more than bail out bankers.

Bannon, I suspect, is smart enough. 80 billion a month can buy a lot of jobs if you use it effectively, which Obama’s Fed never did.

Ian argues that there are other tools President Trump can use which may produce results noticeable in "flyover country," so dangerously undertracked by most of us during the election. "Contrary to what mainstream economists (over 90% of whom, I remind you, did not notice the housing bubble) say," he writes,

Trump can use tariffs to bring a lot of jobs back.  The manufacturer of iPhones (FoxConn) has already said, sure, they’re willing to build them in the US.  They aren’t going to kiss a market like that goodbye.

But there's a crucial "but" here:

But Trump’s tax cutting instincts work against this.  Cutting taxes for corporations isn’t as effective as tariffs, because corporations already pay very low taxes, and multinationals pay damn near none, since they play various jurisdictions off against each other.

So Bannon's economic agenda may run up against his boss's impulses. "If you’re a partisan Democrat first," Ian concludes, "and don’t give a fuck about the working class and middle class, especially in flyover country,"

then Bannon needs to lose his fights, because if he wins them, Trump gets elected again (though, as I note, I don’t think Bannon gets his 50 years, unless he’s far more clever even than he’s so far indicated (not impossible).

#

Reforming The Fed-- A Guest Post From Mike Gatto

An old friend of mine is running for the state Assembly. I've discouraged her and told her the legislature in Sacramento is so riven with corruption and cronyism that nothing meaningful can get done. Fortunately, she's chosen to ignore me. I say "fortunately" because despite the institutional corruption in Sacramento, determined legislators, willing to spend years fighting the establishment-- the way Ted Lieu did when he was in the Assembly and then the Senate-- can and do break through. My old friend running now, Eloise Reyes, is a person like that. But so is a new friend, my own Assemblymen, Mike Gatto (Burbank, Glendale, Los Feliz, Silverlake, East Hollywood, Atwater, Franklin Hills).

Recently I was fascinated by a bill of his, proposing to reclaim the sidewalks and streets for the people. "The public owns the streets," he told the local NPR station. "They don't belong to a valet company. They don't even belong to the city government. They belong to the public." I called him to talk about the bill. He answered my questions and the video at the very bottom more or less explains the bill. But he quickly steered the conversation to income inequality and how he, as a legislator in Sacramento, can do his part to ameliorate that. I asked him if he'd be willing to write a guest post for DWT... and he did:


When You Vote For President, You're Also Electing The Next Head Of The Fed
-by Assemblyman Mike Gatto

We policymakers who care about income inequality and over-concentrated wealth have redoubled our efforts lately to help those in poverty and preserve what remains of the middle class. But there is a large, shadowy force that regularly espouses policies that worsen income inequality, and I don't mean Rush Limbaugh. It's our Federal Reserve.

Readers of this blog are likely familiar with some of the facts. American wealth disparity now exceeds the vast chasm of the Gilded Age, immediately before the Great Depression. Income inequality in the U.S. is so extensive that our own CIA compares us to kleptocracies like Cameroon and Russia. A short, ten-minute drive through Los Angeles is all that is necessary to reveal this. California of the future runs the risk of devolving into Marie Antoinette’s France, where the carefree rich ostentatiously display their fortunes, while scores of commoners look on with a mix of envy and rage.

How did this happen? Decades of federal policies caused it, but of those policies, nothing has more profoundly altered our society than the Fed's practice of “Quantitative Easing” (QE). Here's the concept: A bank buys a treasury bond for $97 million. Assume this bond matures in one year, and will be repaid at $100 million, or (very roughly) a 3% annual interest rate.

Under QE, the Fed simply creates new money, in our example, $98 million, to buy the bond from the bank. By doing so, the interest rate has decreased to approximately 2 percent. And the insertion of the bank as a profit-seeking middleman, instead of buying the bond directly from the Treasury, is intentional. The bank scores an easy profit, risk-free, on top of any commissions. But if the bank fails to lend those funds, it does little for the rest of the economy.

So QE has profited big banks, but what has it has done for the overall economy? Economics 101 postulates that “printing” money leads to inflation, and the Fed has printed trillions in the last decade. The traditional conception of inflation is from a price perspective-- the cost of goods rising over time. When our grandparents tell us that a loaf of bread used to cost a nickel, it is inflation we blame for the price increases.

But these concepts no longer tell the whole story, because the economy has changed. Whereas a century ago, people primarily bought basic goods, now they consume more diversely. Traditional inflation indicators don't include many of the expenses the working class encounters. And the cost of living for working people has indeed risen. Everything from utility bills to the cost of an education have skyrocketed.

To avoid runaway inflation, our nation had to change. The last domino before runaway inflation is wage inflation. To keep up with the rising cost of living, wages usually increase too. But this has not happened. The average family today makes about as much as they did in 1980.

What has kept both wages and the cost of tchotchkes down is globalization-- free-trade agreements and other policies put in place by Congress, corporations, and covetous world leaders. Globalization manifests itself in the U.S. as “outsourcing,” taking jobs like manufacturing, previously done by well-paid Americans, to sweatshops overseas.

Ponder this for a moment: Many American families can no longer afford the goods we want, from air conditioners to iPhones, unless they are made overseas with $5-a-day labor. American companies can keep the cost of toys and microwaves low because they no longer need to pay an American worker to make them. Consequently, things like underemployment and the decline of private-sector unions are also tied to our federal monetary policies.

And the vast sums of newly printed money cascading down Wall Street has to be invested somewhere. Asset inflation is the other half of this ugly picture. Stock, bond, and real-estate prices have risen enormously in the last two decades. Asset inflation unsurprisingly benefits those who hold assets.

And therein lies the gap between the rich and the poor that everyone is talking about. The property and stock-market bubbles, which the Fed now acknowledges it created, have benefited the gentry, because they own far more stocks and real estate than wage earners. When those assets disproportionately expand in value while wages stagnate, the result is tremendous wealth disparity. Yet when the bubbles contract, it is the middle-class wage earners who foot the bailout bill.

Are there small-scale solutions available to policymakers? Sure. For example, I support raising the minimum wage. But many of these efforts amount to using a squirt bottle to extinguish a three-alarm fire. They are not enough. Raising someone’s pay from $25,000 a year to $29,000 every decade will not foster a more egalitarian society if easy-money policies continue to expand disproportionately the vast fortunes of the fantastically rich.

One would hope that in exchange for the social consequences outlined above, our federal monetary policies at least rescued our economy. But recently, many economists have questioned even that. I would hope that more citizens, more lawmakers, and more presidential candidates would start questioning some of these policies. The people who created our nation explicitly prohibited royalty, and warned that vast concentrations of wealth could make our nation like the tumultuous Old World societies many tried to escape. I fear that we are enshrining an inequality in our society that will take generations to change.


UPDATE: And That Parking Bill Of Rights...

This is the kind of legislation that makes life a little better for regular people who don't get driven around in limos.

Rand Paul Hits The Nail On The Head: Audit The Ted

I have to say this Rand Paul swipe at Ted Cruz is hilarious-- and I just couldn't resist sharing it. Disclaimer: DWT is not Cruz-country. But we have a sense of humor and love laughing along with our Republican friends. Rand:

Recently, Senator Ted Cruz decided to skip the vote on "Audit The Fed." Cruz has claimed to be been a long time supporter of "Audit The Fed" but when the vote came up in the Senate he was no where to be found.

However, this is not the first issue that Ted Cruz has flip flopped on or failed to address. Ted Cruz also supported the repeal of the Patriot Act, but chose to vote in favor re-authorizing it.

In 2012, Ted Cruz also failed to disclose a $1,000,000 loan from Goldman Sachs when he ran for Senate. While claiming to be a grassroots candidate, Ted Cruz certainly has no issue receiving special favors from Wall Street and Crony Capitalists.

If we can't trust Ted Cruz to show up for a vote such as "Audit The Fed" and to refuse special favors from Crony Capitalists like Goldman Sachs, then we can't trust him to our President.

Even No-Show-Rubio showed up to vote to audit the Fed (as did Bernie Sanders). Perhaps the Wall Street backers who own Cruz told him to not go to work that day. Or maybe he was at a fundraiser. Schumer may have told his Wall street allies that Bernie might be able to rally a few Democrats for the audit so that they should try to discourage Cruz from coming. As it was only Bernie and Tammy Baldwin stayed true to the idea of the audit. Even those we expect more from let us down on that one.

I'm curious about one thing, though. If Rand's attacks on Cruz help turn Iowa caucus voters off and Trumpf wins, is that a good outcome? For anyone? Or is Rand just lashing out because he feels betrayed by Cruz?

What Can We Expect From Tim Canova If He Beats Wasserman Schultz? Take The Issue Of Auditing The Fed

If someone asks what Debbie Wasserman Schultz is best known for, legislatively-- so not the political shenanigans that have brought her into such universal disrepute-- it would be hard to find a single issue she has worked on more assiduously-- and, alas, more successfully-- than protecting the monopolistic pricing structure of the sugar industry, largely run by her mega-financial supporters, the Fanjul brothers-- Florida Crystals Corp, Domino Sugar, C&H Sugar, American Sugar Refining, Redpath Sugar, etc. The Fanjuls' have financed the political rises of both Debbie Wasserman Schultz and Marco Rubio. It's not about ideology; it's about cash flow. Wassermann Schultz,more than anyone else in Congress, has been able to keep the price of sugar to consumers artificially high... and Fanjul money has bought her power and position inside the Democratic Party. Her right-wing GOP ally, Ileana Ros-Lehtinen, termed her "a tiger" for the way she was able to defeat powerful Democrats like Charlie Rangel trying to lower the cost to consumers.

If Tim Canova beats her in the Democratic primary in August, he will be the new congressmember from the 23rd district, which stretches from Miami Beach up through southern Broward County to Hollywood and Dania Beach and west to Davie and Weston. Democrats enjoy a 22-point registration advantage and Obama beat McCain 61-39% in 2008 and then beat Romney 62-38% in 2012. Canova's presence in Congress would likely be very different than Wasserman Schultz's. As Canova said yesterday, he has a very different set of priorities.

"Debbie Wasserman Schultz has received huge amounts of corporate money-- from Wall Street, private prisons, big alcohol. Her corporate influence shines through in the policies she supports in Congress, like privatizing prisons, opposing medical marijuana, and voting to prevent Elizabeth Warren’s Consumer Financial Protection Bureau from writing rules that would stop racial discrimination in car loans. Those are not the policy priorities of someone who is focused on helping working families-- those are the policy priorities of someone who is more interested in helping their wealthy donors make more money. We can do better than that. Together, we can advance a progressive vision of this country that gives everyone a fair shot at the American Dream."

Tim is a progressive Democrat; he will fight for core Democratic values and principles, from women's choice, racial and gender equality, organized labor, reducing income inequality, working for a clean and sustainable environment, keeping corporate power in check... but the work he has done before-- with Senators Paul Tsongas and Bernie Sanders point in the direction of an expertise in something which is more arcane and incomprehensible for most voters: Fed policy. David Dayen took a good look at that aspect of Tim's campaign in his New Republic piece this week.

The bipartisan effort to hold the Fed more accountable is an on-going effort. The oligarchy is determined to never allow an audit. And Wall Street has enough paid off shills in high places to make it next to impossible. Yesterday Wall Street's top Capitol Hill whore, Chuck Schumer (who has taken $23,538,638 in legalistic bribes from the Finance Sector), engineered the defeat of Ron Paul's S. 2232, a bill to require a full audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks by the Comptroller General. It only got 53 of the 60 votes required and the only Democrats who bucked Schumer and voted for the audit were Tammy Baldwin (D-WI) and Bernie Sanders (I-VT). We usually expect better from Elizabeth Warren, Sherrod Brown, and Jeff Merkley. And, oddly enough, before Schumer threatened everyone, some of the same senators were in the House in 2009 when Ron Paul and Alan Grayson did pass an Audit the Fed bill were co-sponsors of that bill. They voted against the exact same bill this week-- including Chris Murphy (D-CT) and Mazie Hirono (D-HI). And when the Audit the Fed bill passed in 2012 among those voting yes-- but who were apparently cowed by Schumer this week-- were Joe Donnelly (D-IN), Martin Heinrich (D-NM), and Chris Murphy (D-CT). I wonder what Schumer said to change their minds on something so fundamentally crucial.

Marketwatch reported that on the Senate floor Paul said the bill was designed to "pull back the curtain and uncover the cloak of secrecy” at the Fed. Wall Street wants that cloak of secrecy intact and Schumer delivered for them big time. I guess all that Wall Street worry about Sherrod Brown wasn't necessary after all.

Now let's circle back to what we can expect from Canova in Congress if he replaces Wasserman Schultz-- a proposition Florida observers are split on, idealists and activists sure it can be done, establisment types claiming it's impossible. Yesterday I got to ask Tim about the Fed, in the light of so many Democrats in the Senate voting against it despite having once supported it. "Regular independent audits of the Federal Reserve," he told me, "are a good idea. They would help Congress, the public, and the markets to better understand the conduct and course of monetary policy. Unfortunately, the Fed has always resisted more transparency." He continued:

In the early 1990s, the Fed bitterly fought releasing transcripts of its Federal Open Market Committee meetings. The Fed lost, and the sky did not fall. In 2009-2010, the Fed strongly opposed audits of its emergency lending authority facilities. Those emergency facilities were audited, and again, the sky did not fall. Instead, these audits helped us see how the Fed was using its facilities to prop up elite financial interests while ignoring the interests of Main Street.

There is nothing that justifies special treatment for the Fed and monetary policy versus other government agencies and their functions. The central bank should be accountable to Congress rather than Wall Street. As the Washington Post recently detailed, this is what Democrats used to believe for many years. An audit of the Federal Reserve and a more democratic and accountable central bank is a traditional Democratic policy agenda item, first proposed by a former sharecropper from Texas, Wright Patman. By contrast, an 'independent' Fed, unaccountable to Congress and the public, is a traditional posture of Wall Street. During the Great Depression, Roosevelt's Federal Reserve engaged in direct lending to spur recovery. That's the kind of Fed we need, as I noted in the American Prospect in 2010.

Today, even after seven years of economic recovery, depressionary conditions persist for millions of Americans in countless neighborhoods. The Fed should be doing more to promote economic recovery from those left behind. It is time for Democrats to return to the principles and policies of accountability and transparency in our financial markets and central bank. Auditing the Fed is a first step to better understand the nature and scope of existing Fed operations and where Fed policy should go from here.

With Grayson gone from the House-- hopefully battling with Wall Street (i.e., Schumer and McConnell) in the Senate starting in 2017-- House Democrats will need someone to work effectively across the aisle with the serious anti-Establishment Republicans like Justin Amash, Walter Jones and Thomas Massie who want to audit the Fed and hold the Wall Street titans accountable. That's not going to be Debbie Wasserman Schultz or any other Wall Street puppet inside the House Democratic caucus. Please consider contributing what you can spare to Tim Canova's campaign.

Not All Democrats Are The Same

Conservatives opposed Social Security and have been trying to undermine it since it was signed into law August 14, 1935, Right from the day it was proposed Republicans and conservative Democrats were howling at the moon that it was deepen unemployment-- their standard false argument against everything under the sun. The same crew also accused Social Security of being socialism-- since the words have many letters in common. Southern conservatives threatened to tank it if blacks were included and Republicans also worked hard to keep women from being covered.

The program has been successful and popular and has made it much more difficult for Republicans and conservative Democrats to attack it. But that doesn't stop them. Although, the conservative establishment Democrat running for president has not committed to to Social Security expansion, most Democratic lawmakers side with Bernie Sanders on this one-- as do nearly 80% of American voters, across the party spectrum.

Conservative Democratic Party leaders have overseen the loss of nearly 1,000 state legislative seats and 70 congressional seats because they implement insipid messaging as part of election strategies built around their fear of standing with the majorities who demand the rich pay their fair share of taxes and that Social Security expansion be a focus of Democratic electoral strategy. Instead you find mealy-mouthed New Dems sounding exactly like the Republicans who opposed FDR's original proposals. As Social Security Works reminded its supporters yesterday, "When Democrats run on milquetoast policies, such as opposing privatization instead of taking bold stances such as expanding Social Security, they fail to inspire voters and fail to truly address the major economic issues facing our country." Today's big NY Times story that everyone was talking about, For the Wealthiest, a Private Tax System That Saves Them Billions by Noam Scheiber and Patricia Cohen, lays out one of the ways how the super-rich, particularly billionaire hedge fund-operators, have systematized not paying their fair share of taxes. "The trick," they ask? "Route the money to Bermuda and back." And they finance the careers of shady politicians, crooks like Mitch McConnell and Paul Ryan on one side of the aisle and Chuck Schumer and his Schumercrats on the other side, to make it all legal.

With inequality at its highest levels in nearly a century and public debate rising over whether the government should respond to it through higher taxes on the wealthy, the very richest Americans have financed a sophisticated and astonishingly effective apparatus for shielding their fortunes. Some call it the “income defense industry,” consisting of a high-priced phalanx of lawyers, estate planners, lobbyists and anti-tax activists who exploit and defend a dizzying array of tax maneuvers, virtually none of them available to taxpayers of more modest means.

In recent years, this apparatus has become one of the most powerful avenues of influence for wealthy Americans of all political stripes, including Mr. Loeb and Mr. Cohen, who give heavily to Republicans, and the liberal billionaire George Soros, who has called for higher levies on the rich while at the same time using tax loopholes to bolster his own fortune.

All are among a small group providing much of the early cash for the 2016 presidential campaign.

Operating largely out of public view-- in tax court, through arcane legislative provisions and in private negotiations with the Internal Revenue Service-- the wealthy have used their influence to steadily whittle away at the government’s ability to tax them. The effect has been to create a kind of private tax system, catering to only several thousand Americans.

The impact on their own fortunes has been stark. Two decades ago, when Bill Clinton was elected president, the 400 highest-earning taxpayers in America paid nearly 27 percent of their income in federal taxes, according to I.R.S. data. By 2012, when President Obama was re-elected, that figure had fallen to less than 17 percent, which is just slightly more than the typical family making $100,000 annually, when payroll taxes are included for both groups.

The ultra-wealthy “literally pay millions of dollars for these services,” said Jeffrey A. Winters, a political scientist at Northwestern University who studies economic elites, “and save in the tens or hundreds of millions in taxes.”

Some of the biggest current tax battles are being waged by some of the most generous supporters of 2016 candidates. They include the families of the hedge fund investors Robert Mercer, who gives to Republicans [and just dropped a tidy $30 million on Ted Cruz's SuperPAC], and James Simons, who gives to Democrats; as well as the options trader Jeffrey Yass, a libertarian-leaning donor to Republicans.

Mr. Yass’s firm is litigating what the agency deemed to be tens of millions of dollars in underpaid taxes. Renaissance Technologies, the hedge fund Mr. Simons founded and which Mr. Mercer helps run, is currently under review by the I.R.S. over a loophole that saved their fund an estimated $6.8 billion in taxes over roughly a decade, according to a Senate investigation. Some of these same families have also contributed hundreds of thousands of dollars to conservative groups that have attacked virtually any effort to raises taxes on the wealthy.

You see former Treasury Secretary Larry Summer's opinion piece in today's Washington Post? He's not from the Bernie Sanders/Elizabeth Warren wing of the Democratic Party but his point was that "Sanders is right in his central point that financial policy is overly influenced by financial interests to its detriment and that it is essential that this be repaired... Sanders is right that Fed governance has been and is overly tied up with the financial sector. Each of the 12 regional Feds has a board of directors that is made up of nine people-- three banking representatives, three private-sector non-banking representatives and three public interest representatives. The fact that a member of Goldman Sachs’s board at the time of the 2008 crisis was the “public interest” chairman of the New York Fed board is, to put it mildly, indefensible." Don't get too excited though; he then takes a more conservative, establishment, Hillary-oriented "we better not do much of anything" approach, the approach that has made the Democratic Party so worthless to most Americans in recent decades.

Not all Democrats are the same-- nor have they ever been. There have been conservative Democrats working against American families with Republicans for generations. The Democratic Party may be going into a dark period, as Wall Street-owned New Dems take over more and more of the House leadership and the Senator from Wall Street, Chuck Schumer and his pack of vile Schumercrats prepares to take over leadership of the Senate Democrats. The only hope for Democrats in the short run is nominating Bernie Sanders and dedicated progressives who are running on his platform. You can find them here. But not on the 7 second video of the deceitful, wormy little Schumercrat below: