“All Hands On Deck!”: A Trump Presidency Would Sink All Boats
Hello, investors. Come join the foreign policy experts in daily panic attacks over what a President Donald Trump would mean for your world. What does one do about a candidate whose tax plan would send America into the fiscal abyss — who flaps lips about not making good on the national debt?
Should we be investing in the makers of Xanax and Klonopin? And on the personal side, are there enough benzodiazepines to go around?
We’re not talking just about the very rich. Anyone with a retirement account or a small portfolio has something to lose. The economic consensus is that a Trump presidency would sink all boats. And that certainly applies to Trump’s own economically struggling followers in the least seaworthy craft.
“Most Rust Belt working-class Americans don’t get it,” Bob Deitrick, CEO of Polaris Financial Partners in Westerville, Ohio, told me. “The working class thinks he’s going to stick it to the elites.”
The facts: The Trump tax plan would deliver an average tax cut of $1.3 million to those with annual incomes exceeding $3.7 million. The lowest-income households would get $128. (No missing zeros here.)
Folks in the middle would see federal taxes reduced by about $2,700, which sounds nice but would come out of their own hide. Medicare and other programs that benefit the middle class would have to be slashed. So would spending on science research, infrastructure and services essential to the U.S. economy.
Or we could skip the very deep spending cuts and see the national debt balloon by nearly 80 percent of gross domestic product, calculation courtesy of the Tax Policy Center.
Some might think that Trump’s tax plan — including the repeal of the federal tax on estates bigger than $5.43 million — would impress the income elite, but they would be wrong. In a recent poll of Fortune 500 executives, 58 percent of the respondents said they would support Hillary Clinton over Trump.
Most in this Republican-leaning group are undoubtedly asking themselves: What good is a fur-lined deck chair if the ship’s going down?
Then there are the others.
“Do middle-class Americans have any idea what could happen to the economy or the stock market if our president ever vaguely suggested defaulting on the national debt?” Deitrick asked. (His clients tend to be upper-middle-class investors.)
He recalls the summer of 2011, when a congressional game of chicken over raising the federal debt ceiling led to the possibility of a default. The Dow lost 2,400 points in a single week. And taxpayers were hit with $1.3 billion in higher borrowing costs that year alone.
Trump said on CNN that he is the “king of debt,” which in practice means he frequently doesn’t honor it. That’s why many major lenders shun him, talking of “Donald risk.”
Speaking of, Trump famously said in a Trump University interview, “I sort of hope (the real estate market crashes), because then people like me would go in and buy.”
But he also predicted that the real estate market would not tank — shortly before it did. Perhaps he never figured out there was a housing bubble. Or it was part of a clever scheme to peddle real estate courses with brochures asking, “How would you like to market-proof your financial future?”
Imagine a whole country taking on “Donald risk.”
The business community runs on stability. It can’t prosper under a showman who says crazy things and denies having said them moments later. A Trump presidency promises more chaos than a Marx Brothers movie — and you can believe it would be a lot less fun.
By: Froma Harrop, The National Memo, June 7, 2016
“We Can’t Afford To Weaken Social Security”: President Obama Just Changed The National Debate On Social Security
Speaking in Elkhart, Indiana, President Obama made a significant policy statement, one that may get lost in all the talk of the campaign to replace him. He argued that Social Security not only shouldn’t be scaled back, as many believe, but that it should be expanded.
You can look at this as a move to the left. But here’s a better way to see it: as more like a digging in, a resistance to a decades-long effort to lay the groundwork for significant cuts to the program.
Now that Obama has taken this position, it makes it much more likely that most or all Democrats will adopt it as well, which could truly change a debate that up until now has been dominated by an alliance of Republicans and supposedly centrist advocates whose mission is to scale back the most successful social programs America ever created.
Here’s what Obama said in his speech:
But look, let’s face it — a lot of Americans don’t have retirement savings. Even if they’ve got an account set up, they just don’t have enough money at the end of the month to save as much as they’d like because they’re just barely paying the bills. Fewer and fewer people have pensions they can really count on, which is why Social Security is more important than ever. We can’t afford to weaken Social Security. We should be strengthening Social Security. And not only do we need to strengthen its long-term health, it’s time we finally made Social Security more generous, and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned. And we could start paying for it by asking the wealthiest Americans to contribute a little bit more. They can afford it. I can afford it.
Here’s why this is important. For a long time now, the way you’ve shown you’re a Very Serious Person about fiscal matters is to gravely intone that Social Security is “going broke” and say that we must cut back benefits, either by reducing retirees’ payments or raising the retirement age. There’s an entire industry of think tanks and advocacy groups whose mission is to create the intellectual and political environment that will make such cuts possible.
Liberals have only been pushing back against that coalition in a serious way for a few years now. There are some high-profile voices debunking the myth that Social Security is “going broke,” most notably Paul Krugman’s (I won’t bother to go over again why it’s a myth, but if you’re interested I explained it here). But they’ve been hampered by the fact that so many Democratic politicians want to communicate that they too are Very Serious, so they accept some of the premises of the other side’s argument, ceding half the battle over the existence of the program.
And make no mistake: it is a battle over the existence of the program. Despite their assurances that they only want to “strengthen” Social Security, many Republicans would like nothing more than to see it disappear, for two reasons. The first is that they’re simply opposed to large social programs on ideological grounds. The second is that by virtue of its success and popularity, Social Security is an ongoing rebuke to conservative arguments about government. It’s awkward to say, “Government can’t do anything right and should be cut back as much as possible” to a voter who has health care because of Medicare and isn’t eating cat food because of Social Security — and thinks both programs are terrific.
So the political situation is this. Republicans can’t mount a direct assault on the program because it’s spectacularly popular, particularly with those who get checks every month (and who vote in large numbers). At the same time, their campaign against it has been extremely successful in shaping public opinion. Large portions of the public have been convinced that the program is in crisis and is about to go broke, and young people in particular think Social Security won’t exist by the time they retire. The hope of the anti-entitlement forces is that if they can convince enough people of that, when they propose a specific plan to cut back the program, people will say, “Sure, whatever — it’s going broke anyway, so we might as well.”
Until recently, the debate around Social Security consisted of one side saying it was going broke and needed to be slashed, and the other side not disputing those basic assertions too strongly, but saying that we shouldn’t do anything rash. What we are moving toward, however, is the Democratic side saying not only that the program is essentially healthy, but that instead of cutting it we should be expanding it. That’s a profoundly different debate, one that produces an entirely different set of policy options.
Right now you have the president of the United States taking that position, as well as the two leading Democratic presidential candidates. Hillary Clinton has proposed some targeted expansions of Social Security benefits, for widow/ers facing a benefit cut when a spouse dies and for those whose benefits are smaller because they spent time out of the workforce raising children or caring for other family members. Bernie Sanders advocates an increase for all recipients: “expand benefits by an average of $65 a month; increase cost-of-living-adjustments; and lift more seniors out of poverty by increasing the minimum benefits paid to low-income seniors.”
With the exception of Donald Trump, all the Republican presidential candidates this year signed on to some form of Social Security cuts, either through increasing the retirement age or cutting benefits. Trump, however, said we just shouldn’t touch it. In one debate, he said, “It’s my absolute intention to leave Social Security the way it is. Not increase the age and to leave it as is.” Trump doesn’t say how he’d pay for the program, which should undercut the idea that his position somehow challenges conservative orthodoxy; in reality, all Trump is saying is that he’ll make everyone so rich that we won’t have to make tough choices about such things.
By contrast, Democrats feel an obligation to explain how they’re going to pay for the benefits they propose. Obama described “asking the wealthiest Americans to contribute a little more.” That isn’t very specific, but there are a couple of ways you could do that, the most obvious of which is to raise the payroll tax cap. Right now you pay Social Security taxes only on the first $118,500 of your income, which means that beyond that level the wealthy pay a lower portion of their income than poor and middle-class people do.
Hillary Clinton says she would pay for increased benefits by “asking the highest-income Americans to pay more, including options to tax some of their income above the current Social Security cap, and taxing some of their income not currently taken into account by the Social Security system.” That would probably mean applying payroll taxes to investment income and not just wage income as it is now. Sanders wants to do that too, and is more specific about the cap: he would remove it entirely, though he would include a doughnut hole between the current cap of $118,500 and $250,000; you wouldn’t start to pay more payroll taxes until you reached that higher income.
Unfortunately, it’s a little hard to tell exactly how much in greater benefits we could afford with these kinds of measures, because how much the system takes in is heavily dependent on things we can only guess at, like what income growth, inflation, and immigration levels are going to be 10 or 20 or 50 years from now. But now that the most prominent Democrats in the country all agree that we should be expanding Social Security and not cutting it back, we could have a whole new debate on the issue.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, June 2, 2016
“No Good Deed Goes Unpunished”: National Enquirer Lends Its Credibility To Dick Morris
On the very eve of a Democratic National Convention 20 years ago, at the very peak of Dick Morris’s one period of true political power, he was knocked from his pedestal by a story in the Star tabloid detailing his romps with a prostitute that included not just toe-sucking and other unusual carnal delights, but the sharing of material from White House political briefings.
It somehow seems appropriate, then, that at the tail end of his long career in politics and punditry, Morris has signed on with another tabloid:
The National ENQUIRER today announced that renowned Author and Political Commentator Dick Morris would be joining the magazine in the role of Chief Political Commentator & Correspondent. The appointment of Morris to the editorial team further establishes The ENQUIRER as one of the leading voices of this political season.
For his part Morris made it clear what sort of perspective he would lend to the Enquirer‘s political coverage:
As this critical election approaches, I am thrilled to have a perch from which to tell the unvarnished truth, particularly about Hillary Clinton — facts other publications just don’t print because it doesn’t fit.
What’s most interesting about the Enquirer hire is that the tabloid is almost certainly more credible than Morris. In 2012 he lost whatever small shred of authority he had left with predictions — right up to Election Day — that Mitt Romney and the GOP weren’t just going to win, but were going to win big. To call him a laughingstock after Obama won is an understatement.
Old folks may recall that Dick Morris would have never had his famous White House career had Hillary Clinton not encouraged her husband to bring him in after the Democrats’ 1994 electoral debacle — but whatever. No good deed goes unpunished in this quintessentially nasty man’s world.
By: Ed Kilgore, Daily Intelligencer, New York Magazine, June 3, 2016
“For The Moment, The Ghost Of FDR Must Be Smiling”: 2016 Is Turning Into A Historically Great Year For Social Security
Not that very long ago, Republicans were almost universally united in favor of a strategy of “entitlement reform” that included various benefit cuts — some overt, like changes in the formula for cost-of-living adjustments, and some indirect, like retirement-age increases — in Social Security. Most Republicans also favored, in principle at least, some sort of partial privatization scheme for the signature New Deal program. Meanwhile, Democrats were generally divided into a large camp trying to keep the program exactly as it was, and a smaller group — including, at least in theory, President Barack Obama — that was open to such “entitlement reforms” as part of some budgetary “grand bargain” with Republicans.
How things have changed in 2016.
The Republican presidential nomination has been won by a candidate who conspicuously refused to climb aboard the “entitlement reform” bandwagon. Since rank-and-file Republicans have never much bought into Social Security (or Medicare) cuts, it was not surprising this particular Trump heresy troubled party elites but no one else.
Meanwhile, both Bernie Sanders and (to a lesser extent) Hillary Clinton have both been talking about enhancing Social Security benefits, with their main argument being over the financing mechanism, with Clinton being reluctant to embrace a lift in the payroll tax cap that would hit upper-middle-class voters.
But now along comes another potential game-changer: President Obama.
Not only do we need to strengthen its long-term health, it’s time we finally made Social Security more generous and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned,” Obama said in an economic call to arms in Elkhart, Indiana. “We could start paying for it by asking the wealthiest Americans to contribute a little bit more.”
Now you can interpret Obama’s shift any way you want — as a response to leftward pressure from the primary contest, or as proof he was never serious about “entitlement reform” to begin with, or simply as a parting middle-finger-gesture to the GOP, whose leaders were probably less serious than Obama about reaching some “grand bargain” that included high-end tax increases. But the fact remains that the combination of forces in favor of Social Security benefit cuts — or even for simple maintenance of the status quo — has been reduced significantly.
You’d have to say 2016 is becoming the best year for Social Security since at least 2005, when George W. Bush devoted most of his post-reelection political capital to a partial privatization scheme and had his presidential ass handed to him as congressional Republicans headed for the hills while Democrats failed to rise to the “bipartisanship” bait. There will continue to be extensive and fractious arguments over how to improve Social Security benefits and how to keep the whole system solvent. Meanwhile, nobody should take Donald Trump’s assurances on the subject to the bank, any more than anything else the mogul says. And if he loses in November, conventional Republican economic policy, including “entitlement reform,” could make a comeback. But for the moment the ghost of FDR must be smiling.
By: Ed Kilgore, Daily Intelligencer, New York Magazine, June 3, 2016
“Left-Wing Protestors Turning Violent”: How Anti-Trump Violence Could Elect Him
My central supposition about this election is that Donald Trump will lose because most regular middle Americans just won’t vote to make that man their president. This has nothing to do with ideology. It’s just about Trump. Not everyone out there adores Hillary Clinton by a long shot, and I understand well that for a lot of people this is a choice between beef liver and lumpfish, but I just think at the end of the day most people will say, No, I just can’t—I just can’t help make that crude, boorish, vindictive, childish man the president of the United States.
I think this is what will save Clinton—and the country—in the end. But as soon as I think that, I think: But what if I’m wrong? What could make people change their views on Trump, become sympathetic to him?
In theory, a number of things. Trump could stop being crude, boorish, vindictive, and childish. (I said “in theory.”) Clinton could be indicted. The economy could tank. I think those are unlikely—and yes, I saw the jobs report, but it’s early days to start talking about a recession, and it may be a silver lining of the report that it makes the Fed wait longer to raise rates, which most economists I talk to think it should do anyway.
But here’s one thing that’s not a long shot—and is in fact happening right now—that I fear will make Trump a more sympathetic figure to the kinds of Americans I’m talking about: left-wing protestors turning violent and throwing eggs at Trump supporters and burning hats and flags.
Now no doubt, someone has already fired off an abusive tweet at me calling me names and screaming at me that I just want powerless people to STFU, as they say in Twitterland. No, I do not want powerless people to STFU. I emphatically want powerless people to have more power. And the way you get more power in this country is by protesting peacefully, and voting, and doing all those boring things.
And I emphatically don’t want a racist, misogynist, neo-fascist in the Oval Office. But violent protests at his rallies increase the likelihood of us getting exactly that.
The operative word in that previous sentence is violent. Protest, Americans like. It’s in the DNA and all that. Protest got us where we are. It got us the 40-hour work week, the civil rights revolution, the end of the Vietnam war. Occasionally in these instances, things turned violent, especially in the case of labor organizing. But usually, the violence was initiated by those who held the power—the companies, in the case of union organizing, or the state, in the case of civil rights.
In the modem-day American context, it’s not in the interest of the powerless to initiate violence. They’ll always get screwed. Always. They’ll always be blamed by the media, called “rabble-rousers” and “trouble-makers,” and the worst of the footage, like those people throwing eggs at that woman in the Trump football jersey in San Jose, will be shown over and over and over again, giving my regular middle Americans up above reason to think the violence was 50 times worse than it actually was.
And those regular middle Americans will say to each other: “Goodness, Jean, those protestors are just awful, aren’t they?”
“Why, yes they are, Bob. So rude! And dirty, too.”
“That’s not the American way!”
And it will go on from there, and that night after dinner, they’ll flip on CNN (because these are not Fox viewers—an important point) and they’ll see more footage and they’ll see interviews with Trump supporters who were standing there more or less minding their own business and suddenly got their faces punched in, and they’ll work themselves into a reactionary state and decide that maybe a vindictive boor is precisely what those people need.
I guess the thinking of violent protestors is, Trump is a fascist, and the right response to fascism is violence. In some times and some places, yes, it’s been the necessary response. But we’re not anywhere near that point. Trump doesn’t have a private army. Yes, some of his rallies were getting awfully creepy there for a while, and he did inexcusably egg his people on toward violence. But all that has tapered off. If Trump won the presidency and assumed emergency powers, then yeah, I’d understand violence then. Might even advocate for it. But we’re a long way from that.
Instead, we have reached a point where we have to start worrying about the impact of all this. You have to admit—it takes a lot to make Donald Trump look like a victim. But that’s what he’ll look like to middle America if this violence continues. And it will continue.
There is, however, one person who might have the power to end it. No, not Hillary. I mean the candidate the protestors, peaceful and violent alike, undoubtedly admire the most. If this gets much worse, even though none of this is his fault, maybe Bernie Sanders could step up here. That would be actual leadership. But they might not listen even to him. Deep down, some of these people probably want Trump, because a Trump victory would confirm their deepest-held belief about what a fascist country this really is. They’ll erase out the part about how they helped make it so.
By: Michael Tomasky, The Daily Beast, June 3, 2016
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