How the GOP Blew It’s Chance

The window for Republicans to create a multiracial working-class party closed this weekend when 49 senators nixed COVID-19 aid.

They Senate on Saturday passed President Biden’s $1.9 trillion coronavirus relief package which includes a $1400 stimulus check so go out and buy yourself something nice.  Like November‘s rent. 

The $1.9 trillion Covid relief bill passed by the Senate this week while the Republicans spent most of the weekend trying to derail it while still whining about Dr. Seuss. 

The past few months have offered a deeply revealing look at the state of American democracy and the course it could take over the next few years without major reforms. On the one hand,  we saw a political faction which represents a minority of American voters try to overturn an election they lost and then sell a violent insurrection interfere with a lawful counting of electoral votes. Then about two months later we saw 50 senate Democrats who represent about 41 MILLION MORE Americans than the 50 senate Republicans vote to deliver one of the largest rescue bills in history.  The relief bill has been massively popular in poll after poll. Not a single Republican joined them in the Senate or in the house seemingly because they were too busy doing jobs like reading Green Eggs and Ham. 

The Republican Party has become (once again) the party of NO. And their brand is pearl clutching over reaction.

While the Democrats are working to help real people. The Republican are all up in arms about The Muppets, Dr Seuss and Mr Potato Head.  They used every delay tactic they could to actually delay stimulus checks going out to 80% of Americans.  

The GOP wants all children back to in person learning in schools but they do not support the bill to get vaccines to everyone.  

They spend more time trying to make voting more difficult than they did in confirming Trump’s last minute supreme court justice. 

Politics will ALWAYS be part of the process. But maybe the GOP could take a stand on something a little more substation that Mr Potato Head?!  

While you wait for your stimulus check- remember the GOP delayed it. 

While you wait in line to vote in the next election- remember it was the GOP that made it harder. 

It was less than two weeks ago that Texas Sen. Ted Cruz, a past and future presidential hopeful for the Republican Party, stood before an annual confab of conservative fanatics and proclaimed he could see the future of the Grand Old Party. In Orlando, a stone’s throw from Walt Disney’s Fantasyland, Cruz promised CPAC that the GOP will be “the party of steel workers and construction workers and pipeline workers and taxi cabdrivers and cops and firefighters and waiters and waitresses and the men and women with calluses on their hands who are working for this country.”

Yet on Saturday afternoon, Cruz and 48 of his Republican colleagues raised their uncalloused, millionaire hands and flipped a giant middle finger to the American middle class who could have returned their party to power in Congress in 2022. In unanimously — and futilely — opposing the Democrats’ 50-49 passage of the $1.9 trillion COVID-19 relief bill that will likely be signed by President Joe Biden later this week, Cruz and his fellow GOPers went on the record opposing $1,400 checks for struggling taxi drivers, expanded jobless benefits for waiters and waitresses whose jobs were obliterated by the pandemic, and local aid to stop the feared layoffs of cops and firefighters.

Even before this weekend’s historic vote that will define America’s politics of the 2020s, the Republicans provided a giant metaphor for its drop-dead message to the working class when a party stalwart — Wisconsin Sen. Ron Johnson, who concedes his “preference” is not even running for another term next year —dug deep in the Senate rulebook to force clerks to read aloud the entire 628-page relief bill. The goofy parliamentary stall took some 10 hours and 43 minutes, finally ending around 2 a.m. Friday morning as an anguished Johnson — required to be present — buried his exhausted face in his hands. How bad were “the optics” — in Beltway lingo — of the Wisconsinite’s stunt? While the move held up billions to speed up coronavirus vaccines, approximately 750 more Americans died from COVID-19.

The father of the now lost-in-the-wilderness American right, William F. Buckley, wrote famously that the modern conservative “stands athwart history, yelling Stop.” The political and moral bankruptcy of that philosophy was on full display this weekend, as Republicans planted their flag as the party of obstruction and celebrators of broken, gridlocked D.C. politics, while the Democrats voted to keep history moving forward, with a bill supported by about 70% of the American people, including millions of rank-and-file GOP voters.

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Sen. Ron Johnson (R., Wis.) tried to hold up the coronavirus relief bill.

Greg Nash / MCT

Yes, there were moments when the Democrats — still no more of an “organized political party” than when Will Rogers told that joke a century ago — looked determined to snatch defeat from the jaws of victory, confronted with a bill that, with the arguable exception of Obamacare in 2010, does more for the U.S. middle class than any legislation since Lyndon Johnson’s Great Society since the mid-1960s. The macho posturing of West Virginia Sen. Joe Manchin — for whom getting on the Sunday talk shows matters more than his state’s high rate of poverty — nearly toppled the bill, and the Democrats’ blind spot on the $15 minimum wage is deeply disappointing to leftists who voted for Biden last November.

But in the end, the Democrats’ resolve and unity among its one-vote Senate majority was a stunning victory for a new American political reality in the 2020s. It involves forging an all-new definition of “bipartisanship” around hardball politics for measures that are supported by majorities of citizens, rather than negotiating with a Republican Party that continues to rally behind a Big Lie around nonexistent voter fraud and the 2020 election that threatens our democracy.

Saturday’s bold vote didn’t change the overriding dynamic behind America’s warring political tribes. The Democrats’ base is still college-educated voters, while Republicans’ toxic stew of both class and racial resentments will continue to amp up white people without diplomas. But Democrats just passed a bill that, frankly, does more for the nation’s broad, multiracial working class and the less-advantaged than for upscale suburbanites who put Biden over the top in 2020. In doing so, the party has a great chance to stop the slow bleed of working-class voters — especially a shift of Latinos and some Black voters to Donald Trump last fall — and ride a booming post-pandemic economy in 2022, thus bucking the powerful trend of a party in power losing seats in a midterm election.

After a half-century or so of watching American politics, it’s hard for me to overstate what an epic flub we are witnessing from today’s GOP. Trump’s reckless, demagogic presidency riled up voters on both sides; even in losing badly to Biden, the 45th president increased his turnout from 62 million in 2016 to more than 74 million, in a way that suggested a path forward for a new kind of right-wing populism. Indeed, many voters on the long lines in pro-Trump precincts cited their initial $1,200 stimulus check, and there’s little doubt that the GOP standard-bearer would be serving his second term if he’d forced through a second $2,000 check before Nov. 3, as Trump himself realized after it was too late.

The tragedy of the coronavirus had offered Republicans an opportunity to show a kind of economic empathy for the “essential workers” of the blue-collar electorate that would have doubled down on its current limited strategy, which is mostly cultural warfare. But — other than a laudable child tax credit offered by Utah Sen. Mitt Romney, who’s not super popular among the party’s pro-Trump base these days — GOP politicians have only offered the middle class empty platitudes and pale light beer versions of Democratic social welfare, much as the Dems looked utterly lost trying to sell watered-down Republican ideas for 30 years after Ronald Reagan.

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In this image from video, the vote total of 50-49 on Senate passage of the COVID-19 relief bill, is displayed on screen in the Senate at the U.S. Capitol in Washington Saturday.

AP

The Republicans do have a plan but it’s as dumb as it’s morally repellent — doubling down on its scheme to try to win national elections with just 46-47% of the popular vote, aided by the anti-democratic aspects of the Constitution and our political norms as reflected in the makeup of the Senate, its arcane rules and, in presidential years, the Electoral College.

This week showed us both what the GOP is incapable of doing — aiding the middle class — but also its fundamental three-prong strategy for the elections of 2022 and 2024. First, burn a lot of empty political calories on cultural outrage such as the supposed banning (not really) of Dr. Seuss and (also not really) Mr. Potato Head, with the subliminal messages that what leftists really want to cancel is their white supremacy. Second, muddy the waters on the pandemic with “free-dumb” policies like Texas and Mississippi ending mask mandates and other restrictions just as new variants appear. Third — and this is really the centerpiece — is to fall back on Trump’s 2020 Big Lie to pass a slew of voting restrictions targeting Black voters, Latinos, or the young, to win in 2022 not on the best ideas but by picking the voters.

The fact that the current Republican Party is so quick to fall back on racism, xenophobia and misogyny makes me happy that its leaders seem to have also flunked Poly-Sci 101. The opportunity for the GOP to become a true majority national party as a foil to the increasingly diploma-wrapped image of the Democrats — in a nation where just 37% of adults currently hold four-year college degrees — was right there, if the party had been willing to put its money where its mouth was, on Cruz and his phony-baloney rhetoric about cabdrivers and the wait staff.

Instead, the 2022 election will turn on Republicans’ success as an anti-democratic (with a small “d”) party trying to keep as many legitimate voters away from the ballot box as possible. For Democrats, the ultimate lesson of this weekend may prove less about economics and more about courage in using just 51 votes to make the tough calls for saving America. Giving aid to the working class was a good first step for the Democrats, but whether it matters at the polls in 20 months depends on their bravery in abolishing the filibuster and passing laws to make sure that the working class can still vote.

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Will Bunch

Will is the national columnist — with some strong opinions about what’s happening in America around social injustice, income inequality and the government

Time to Trust Science.

Science is very rarely convenient. 

But we do not have time to deny it.  Today, short term,  we are facing a pandemic. We have a plethora of long term environmental issues having to do with climate change.  We have to look to the future to get out from under these. We cannot do nothing and wish for the “good ole’ days”.  

New Hampshire is just starting to flatten the curve of the virus. If we do not take a smart approach- all our hard work will be for nothing. I am not sure my businesses will survive another long term shut down. The only way we realistically get through this is by working together.  

My businesses are open because of the hard work of my staff. My businesses will remain open because our clients are willing to wear masks and keep a safe distance from each other.  When a vaccine comes out it will make things easier. I was speaking with a friend, like many of my friends he is MUCH smarter than me.  We were talking about the vaccine and he said that vaccines are over-rated. That through homeopathic  measures and nutrition we can boost our immunity and reduce our risk of catching the virus and lessen the effects if we catch it.  While I believe that is TRUE.  I do not believe that it is practical. A Virus does NOT know boarders.  It does not discriminate.  If one person follows a homeopathic approach and reduces their symptoms, they still carry the virus and infect many people.  There are probably millions of people who cannot afford or do not have access to homeopathic alternatives.

Yes- I think that pharmaceutical companies are evil.  But like medicine, it may taste bad and be difficult to take, it will work to keep us healthy. The lack of a response from the federal government has already cost lives and possibly billions of dollars to the economy. The abdication of leadership and responsibility has left the states and local government to fend for themselves. We cannot build a wall between states to protect us from the virus any more than building a wall will protect us from a changing climate.

Now is not the time to go backwards. New Hampshire right now has a Republican Senate candidate who disputes medical experts advice calling for the use of masks to slow the spread of the virus. Donald Bolduc falsely claims that masks are harming us even as President Trump encourages Americans to wear masks.  

Bolduc’s opponent in the GOP primary is Corky Messner, himself a climate science denier who has stoked doubts about coronavirus vaccines. 

Wow- what a terrible choice between these 2.  Just Another reason the GOP has failed us.

 

Trump is Playing One State Against The Other

Of course politics can me divisive. No one political party has a monopoly on playing states against each other.

In times of crisis we need a leader that will bring us together not drive us apart. Trump seems to more interested in fixing the blame on someone than fixing the problem.

For years our country has become more and more decentralized.  Governors, of course, want “States Rights”. Living here in Northern New England it is often hard to understand the issues facing Southern California or the plains of the midwest.  Our decentralization is a contributing factor to the current Covid19 crisis.  The Coronavirus does not recognize state boarders.  As a country, we probably have enough Masks, Gloves and other PPEs.  We probably have enough ventilators.  They just are not where we need them.  States and cities are left negotiating with each other and the federal government for needed supplies. There is nothing efficient or cost effective about this.

New York Gov. Andrew Cuomo slammed back at President Donald Trump Monday, informing him that it’s Republican red states — not New York and other blue states — that are sucking up more national resources than they’re contributing.

The Democratic governor was responding to a tweet by Trump complaining that the nation shouldn’t have to bail out “poorly run states.” In “all cases,” Trump claimed, they are “Democrat run and managed.” He specifically named Illinois, headed by a fierce Trump critic, Gov. J.B. Pritzker (D).

“If you want to go to who’s getting bailed out and who paid what, nobody would be bailing out New York state,” Cuomo said at his daily press briefing, calling New York the “number one giver.” The state has been “bailing” out red states for decades, Cuomo said.

In fact, the top six of eight states that pay more to the nation than they get back from the federal government are blue states. Illinois gives as much as it gets, according to an analysis by the Rockefeller Institute of Government. Three of the four biggest “taker” states in the nation, which collect at least twice what they contribute, are Republican-led states.

Donald J. Trump

@realDonaldTrump
Why should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?

190K
10:41 AM – Apr 27, 2020

“Nobody puts more into the pot than the state of New York,” Cuomo said, noting that the state has paid out $116 billion more than it received in federal spending since 2015, he said. The governor named New Jersey, Massachusetts and Connecticut as additional “giver states.”

“Who are the taker states?” Cuomo asked, and he named Kentucky and pointed to states in the “southeast part of the country.” Alabama, Arkansas, Florida, Georgia, Tennessee, Louisiana, Mississippi, Missouri, Oklahoma and West Virginia, among other red states, all take more in federals funds than they contribute.

Senate Majority Leader Mitch McConnell (R-Ky.), who has said he’s opposed to “blue-state bailouts,” suggested last week that states should simply go bankrupt if they’re running out of money amid the COVID-19 crisis. His state already gets more bang for every buck it pays to the federal government. Kentucky collects $2.41 for every dollar it sends to the national coffers, according to data analyzed by the Rockefeller Institute.

“This is not the time to be talking about dollars and cents among members of a community who are trying to be mutually supportive and help each other,” he said. “This is not the time to be saying, ‘Well, you put in a dollar more than I did,’ or ‘I put in $5 more than you did.’”

But, he added, “If you want to call for an accounting, you lose.”

Sen. Rick Scott (R-Fla.) also complained Monday that Florida taxpayers, who “live within our means,” shouldn’t have to bail out New York, California and Illinois. His state’s taxpayers aren’t living within their means. Florida takes in $1.21 in federal funds for each dollar it pays to the U.S. government.

Facts NOT Fear

We have entered the stage of 24 hour news cycle about the Coronavirus, Covid-19.  The virus has devastated our economy and certainly my business will take some time to get back on track WHEN we are allowed to reopen.

I am a daily shopper (well, I WAS a daily shopper). It is just my wife and I now that are kids are grown. I have NO idea what I am going to make for dinner until. go to the store and see what looks good.  Early last week I was at the store, it was fairly quiet and the shelves were starting to look “normal” again. There was one man pushing a completely overloaded cart. Filled with enough food for months. The complete look of terror on his face was what struck me. I felt so bad for him.  He had been worked up into such a frenzy that he was fear shopping. Buying things before anyone else did.

I blame this on the national politicians in our country. ALL SIDES.  For decades they have just peddled fear. Be afraid of the other side. Be afraid of the other country. Be afraid of that person who doesn’t look like you. Be afraid of that person who doesn’t think like you.

What happened to humanity?

This is a time for FACTS not FEAR.  Here are the facts and this is what we can do to make it better and improve our odds.

I came across an article on Yahoo news finance. It was had some great facts about the spread of the virus and what to expect.  I have edited it just for readability.  IT IS GOING TO BE OK.  It is just going to take a while.

Inan Dogan, PhD

Executive Summary

Right now 2 million Americans are infected with the coronavirus. The total U.S. death toll by April 15th will be more than 20,000. We estimate that 80 thousand of the 2 million infected Americans will be hospitalized over the next 2 weeks.

Thesis:

./////////////,,,,,,Three parameter estimates are needed to predict the number of infections and number of deaths over the next 3 weeks: infection fatality rate, infection growth rate, and the number of days between initial infection and resolution (either death or recovery) of the infection.

1. We now estimate that the coronavirus’s fatality rate is ~0.8%. This means 1 out of every 125 infected people will die. We know that almost all countries had problems with testing and identifying all infected people. There are two exceptions to this: South Korea and Japan’s Princess Diamond cruise ship.

South Korea tested more than 320,000 people and identified 8652 infections. The total number of deaths was 94. This means South Korea’s case fatality rate is 1.09%. We believe there are still a considerable number of South Koreans who were asymptomatic and weren’t tested. So, we estimate that the actual fatality rate is anywhere from 0.5% and 1%.

In early February the Princess Diamond cruise ship was quarantined in Japan after one of the passengers tested positive. This was a bad idea for passengers as a total of 712 passengers were eventually infected and 7 of these people died. As far as I know all 3000+ passengers of this cruise ship were tested, so we have a reliable dataset with pretty accurate number of infections and number of deaths. The case fatality rate on Princess Diamond is 0.983%. We know that the fatality rate is higher among older people. Assuming that the median age of passengers on Princess Diamond is greater than America’s, which is 39, we can estimate that the new coronavirus’ fatality rate will be around 0.8% in America (maybe a little lower, but this is a nice round number).

2. This paper estimates that an infection takes around 23-24 days to resolve. The first 5-6 days the patient doesn’t show any symptoms. It takes an average of 5 days between the onset of symptoms and hospitalization. Finally it takes about 2 weeks between hospitalization and death (about 10 days in ICU).

3. There is no accurate direct way of calculating the infection growth rate because there is a huge variation in the number of people we are testing. [We were testing only a few people a couple of weeks ago, so we identified only a small number of infections. In recent days we started testing a large number of people (especially in New York) and now our case count is growing at alarming rates.] However, we can assume that the death rate is constant and we use the change in deaths to estimate the infection growth rate. There is a 23-24 day lag between an infection and the resolution of that infection. This means the growth rate in the number of deaths today is a very good estimate of the infection growth rate 23-24 days ago.

On March 19th, the U.S. reported a total of 205 deaths. That figure was 85 on March 16th and 47 on March 13th. This means the number of deaths doubles about every 3 days. This also means that the number of infections were doubling every 3 days on February 25th (the people who are dying today were infected on February 25th).

So, here is my simple mathematical model.

For the sake of argument, I am going to assume that all 205 American deaths occurred on March 19th and all of these people were infected on February 25th (this assumption simplifies calculations, we don’t need a complex model to have a thorough understanding of what is going on).

Our estimate for the fatality rate is 0.8%; this means for every death we have 125 infections. Since we have 205 total deaths, there must have been 205 times 125 total infections on February 25th. That’s 25,625 infected people. If you understand this part of the calculation, the rest of our analysis is pretty straightforward.

The number of infected people doubles every 3 days. So, on February 28th the number of infected people doubled to 51,250 (let’s round it down to 50,000). Three days later, on March 2nd, the number of infected people doubled again to 100,000.

Do you see start to see the gravity of the situation? There were 100K infected people on March 2nd in America. We know that 0.8% of these people will die by March 26th. That means our death toll will be 800 on March 26th [you can verify the accuracy of our model on March 26th by comparing the actual death toll to our estimate].

Our model tells us that the number of infections doubled again on March 5th, reaching 200,000.

Our model also tells us that the number of infected people was 400,000 on March 8th, 800,000 on March 11th, and 1.6 million on March 14th.

These calculations imply that the American death toll will be 12,800 on April 7th. To put that in perspective, yesterday, the total death toll in Italy was 3400 and 3000 in China.

I know that these are just estimates, but even if my estimates are off by 50%, we will have still twice as many coronavirus deaths as China 2.5 weeks from now.

Enter social distancing. On March 14th, various municipalities and agencies started introducing social distancing. The practice eventually began to be suggested or required in the hardest hit parts of the nation.

The good news is that we started cancelling schools and closing down restaurants around March 14th. So, the number of total US infections isn’t doubling every 3 days anymore. Unfortunately, the horse is already out of the barn. As of March 14th, one out of every 200 Americans is already infected.

Italy put the entire country under lockdown 12 days ago, yet its death toll is still increasing exponentially. That’s because there is a 24 day lag between an infection and its resolution. We haven’t put our country under a lockdown yet. (As of 3/24 the death toll in Italy, although staggering, has decreased. Showing that social distancing has worked. TR)

Except a few educated people, no one has any idea that there are already around 2 million infected people in America today and the American death toll will exceed 15,000 in just 24 days. If we don’t take strict measures, we will be reporting 1000 deaths per day in just 3 weeks.

This is a mathematical certainty. It is inevitable.

China taught us how to contain the coronavirus outbreak. We have to put the entire country under a strict lockdown.

Update 1 (March 21, 2020): The number of deaths on the Princess Diamond cruise ship increased to 8. The case fatality rate for this group is 1.12%. This doesn’t change any of our parameters or estimates. We still expect to see around 800 coronavirus deaths in the U.S. by the end of March 26th.

 

 

Who Will Repair What Is Broken?

By Michael Starr Hopkins

I am a Democrat, but I have always felt that strong opposition parties were good for the country. For this, I have sometimes been harshly criticized by other Democrats. Such criticism could be confusing. Aren’t Americans supposed to promote bipartisanship? Indeed, when I first came of age politically, I fundamentally disagreed with Republican leaders like former Gov. Chris Christie and former Rep. Paul Ryan on policy, but I respected them as public servants. I believed that they were the type of leaders who would turn the GOP in particular away from nativism and lead Republicans into some semblance of 21st century politics.

I was wrong. Instead, the GOP has done the opposite. Republicans have taken partisanship to a level that would make Newt Gingrich blush. They have embarrassed themselves, and they have embarrassed me for even suggesting that they could provide a better path forward — and for what, some tax cuts and conservative judges? As angry as I am at Donald Trump for his lack of decency and empathy, I am equally as disappointed in the Republicans who aided his rise to power.

Still, while most Democrats would understandably prefer an America free from the Republican Party, I somehow find myself hoping for the rebirth of a more tolerant and inclusive conservative party that can help to one day restore America’s faith in government.

Repairing what is broken is a task too heavy for one party to bear, and an obligation too onerous for any single group. Rebuilding our institutions and strengthening the bond between people of differing viewpoints requires a commitment from each and every one of us. It requires honest brokers, willing to find common ground and ignore the naysayers whose sole goal is to be the loudest in the room. It requires a confidence of purpose that cannot waver in the midst of an election season that could signal the end of one’s political career. Most importantly though, repairing our broken country requires Republicans in particular to stand up and take their party back from those who are attempting to bastardize their message

Succumbing to the worst tendencies of one’s party isn’t new or unprecedented; we’ve been here before. Moral crises have repeatedly tested the will of our great nation. This country has battled through the dark days of slavery, segregation, McCarthyism and Watergate, and still we stand. Not because of magic pixie dust but thanks to brave patriots, willing to take unpopular yet principled stands because our social contract demands it.

And America has always managed to find its way back from the brink because of our ability to come together, in search of a shared purpose, when we as a country need it the most. We are edging toward a brink now, not of violence necessarily but certainly of near-intractable partisanship. Just look at the differing ways the impeachment inquiry is being covered. I may be foolish, but I still believe in our shared purpose. I still believe that, in spite of those who have turned their back on our motto, e pluribus unum, principled conservatives will find their way back home.

So who will stand up now and help take the Republican Party in a new direction? Election season cannot go into perpetuity, at some point we must govern. Someone must lead.

I am not naive, nor do I believe that the majority of our political leaders have the intelligence or moral compass to act with the courage of Abraham Lincoln. Expecting an overnight solution to a longterm problem is a recipe for failure. And I realize that the same people who mocked me for believing that Republicans and Democrats could work together before, will likely mock me once again for believing that all hope is not lost.

I realize that the same people who mocked me for believing that Republicans and Democrats could work together before, will likely mock me once again for believing that all hope is not lost.

But what other choice do we have? Our democracy requires compromise and courage to meet the challenges that we face. We cannot afford to continue down the broken roads that have led us to gridlock. We need each other.

Like it or not, Democrats need a strong Republican Party to act a a counterweight in our deliberative process. The Framers fully intended for progress to be incremental, not overnight or all at once. A democracy absent diversity is not a democracy. This symbiotic relationship may not be pretty and certainly may not always be successful, but it is necessary to the framework that makes us a shining star on a hill.

I have often been called too optimistic and criticized for my faith in my fellow American. Yet I wear those labels with pride, because at the end of the day we have to believe. We have to believe that we are part of something worth fighting for and saving.

Most importantly though, we have to believe in the goodness of each other and our ability to correct course even when it seems impossible. That has been our saving grace throughout history, our ability to turn this social experiment around and live up to our motto “out of many, one.”

Donald Trump’s Campaign Is Becoming an Exercise in Public Insanity

If it doesn’t work out in his favor, someone is always conspiring against him.

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If the economy goes south, as a lot of people are warning us it will, then it’s comforting to know that the president* already is only a baby step away from blaming the Gnomes Of Zurich. From The New York Times:

He has insisted that his own handpicked Federal Reserve chair, Jerome H. Powell, is intentionally acting against him. He has said other countries, including allies, are working to hurt American economic interests. And he has accused the news media of trying to create a recession. “The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” Mr. Trump tweeted last week. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”
Mr. Trump has repeated the claims in private discussions with aides and allies, insisting that his critics are trying to take away what he sees as his calling card for re-election. Mr. Trump has been agitated in discussions of the economy, and by the news media’s reporting of warnings of a possible recession. He has said forces that do not want him to win have been overstating the damage his trade war has caused, according to people who have spoken with him. And several aides agree with him that the news media is overplaying the economic fears, adding to his feeling of being justified, people close to the president said.

Oh, lovely.

Weaponized paranoia always has been at the heart of El Caudillo del Mar-a-Lago’s political identity. In the tangles of his mind, he is always standing strong and alone against a vast array of enemies, including the minions of The Deep State and certain Guatemalan toddlers. If he feels like his presidency* is in serious peril, he’s liable to go off the deep end. He’s already setting up the members of the cult to refuse to accept the result of any election he doesn’t win. (He’s recently gone off again about those busloads of Massachusetts voters who drove to New Hampshire to deprive him of his win there in 2016. Neglecting the fact that IF all these people were bussed in to vote- they voted IN a Republican Governor) If a recession hits, he’s already blamed his own Fed chair and the evil media. Who would be left?

The president’s broadsides follow a long pattern of conspiratorial thinking. He has claimed, without evidence, that undocumented immigrants cast millions of ballots, costing him the popular vote in the 2016 election. During the campaign, he predicted that the system might prove to be “rigged” if he did not win. He conjured up a “deep state” conspiracy within the government to thwart his election and, more recently, his agenda. And he has said reporters are trying to harm him with pictures of empty seats at his rallies.

Unless somebody finds the strawberries soon, this campaign is going to be an exercise in public insanity.

It May Be Time To Sell Your Stock

From Jim Collins at  FORBES

The yield curve has inverted and you should sell your stocks.  That is a simple, declarative statement, and yet one that I have not read anywhere this morning.  Having awakened to the news that the yield on the 2-year U.S. Treasury note had risen above that on the 10-year U.S. Treasury note, I have enjoyed this morning’s sell-off in the equity markets.  I founded a new asset management firm, Excelsior Capital Partners, a month ago to initiate short positions on stocks, and so far the timing has worked out well.

There seems to be a basic misunderstanding of the meaning of the inverted yield curve and its meaning for equity markets.  I am making a few bucks on this confusion, to be sure, but I would rather see an educated investing public. Some of the articles I have read this morning in the financial media are wildly misleading.  So here are a few answers to basic questions:

What is an inverted yield curve?  The yield spread is a simple calculation that involves subtracting short-term interest rates from long-term interest rates.  The yield curve is a plot of interest rates for government bonds of all maturities in a given country. Bond yields represent, in percentage terms, the price investors are willing to pay for those securities.  When demand for bond purchases rises, prices rise, and thus yields (interest rates) fall. When long-term bond yields are lower than short-term yields, the spread is negative and the yield curve is inverted.

Money has a time value.  A dollar today should always be worth more than a dollar tomorrow.  I think most investors grab that basic fact.  There’s a second derivative there, however.  At most times in economic history, a dollar two days from now has been worth more than tomorrow’s dollar, which is worth more than today’s dollar.  Similarly, a dollar a year from now is worth more than that two-day dollar and the dollar five years from now is worth more than the dollar one year from now, and on and on and on.  If I am lending you a dollar for five years not five days, I want an extra incentive to do that. Five years gives you much more time to default on that loan, plus—in a concept known as duration among bond investors—there is a much larger chance that the interest a lender will earn over a longer time period can be rendered less valuable by inflation, always the biggest factor impacting bond pricing.

The rate of inflation in the U.S. probably won’t change much in three months.  In ten years, though, it could show a marked difference.  The Federal Reserve and other central banks have consistently referred to the fear of deflationary pressures as the biggest worry facing financial markets.  This morning’s bond markets are telling you that inflation is going to be much much lower in 2029 than it is in 2019.

That is the key meaning of an inverted yield curve.  Inflation expectations for future periods are lower and that can only mean a slowing, and perhaps contracting, global economy.  Stocks are valued based on growth, and the colossi that are Amazon, Facebook, Netflix, etc. have all been built on rapid rates of growth in revenues and earnings.  If the bond market is telling us the global economy is slowing, the stock market should price in lower rates of growth for individual stocks.  That is why shares of those tech titans—and the vast majority of stocks around the globe–are falling sharply today.

Isn’t lower inflation a good thing?  If it costs me less to buy things outright and lower interest rates also result in lower costs to finance purchases made over time (house, car, etc.) how is that a bad thing?  Simply put, it’s not a bad thing for consumers. At the same time it is a horrible, terrible, awful thing for financial institutions such as banks. If it costs a bank more to finance the money underlying a loan than the interest that bank can earn on the loan, the bank would take a loss on that loan.  Obviously bankers are not stupid, and loan growth can be expected to decline when short-term funding costs are higher than long-term loan prices.

The global economy in 2019 is based on access to credit, and it has been for the past 50 years.  This is what we should have learned from 2008. Jamie Dimon’s balance sheet at JPMorgan is much more important than the one based on your household’s financial situation.  I am sorry if that offends you from a political standpoint, but please do not misunderstand. There have been zero real changes in policy or statute since 2008 that would change that.  If credit conditions dry up, we could just easily see a meltdown in 2019 as we did in 2008-2009. These are basic facts, not conspiracy theories or political slogans.

For the past 10 years, naysayers have been calling for another global financial crisis and yet my stock portfolio has gone up, up, up…what is different now?  The biggest development in the world economy over the past decade has been the astounding growth of the financial system in China.  China’s economy, which was barely dented by the financial crisis that ravaged Western economies in 2008-2009, is now, ten years later, just as dependent on credit as that of the U.S. and in fact more so, by certain measures.  The Chinese only really embraced state-sponsored capitalism in the early 1990s and it took them 20 years to embrace the concept of leverage. But, man, have they done it in a big way.

In December 2008 the total assets of the Chinese financial system were $9.1 trillion.  That compared to $12.2 trillion in U.S. financial system assets. As of June 30, 2018, the latest data available, Chinese financial system assets totaled $39.0 trillion dwarfing the U.S.’ total of $17.5 trillion.  So, the Chinese financial system has more than quadrupled in the past decade. Does that worry you? It should.

That’s why pictures of protestors occupying the airport in Hong Kong are so scary.  That’s why the Chinese government’s decision to let the yuan/dollar exchange rate rise above 7:1 (making Chinese financial assets worth less in dollar terms) is so scary.  That’s why President Trump’s trade tweets can and will move the markets significantly—in either direction. Anything that makes Chinese companies less likely to repay their loans is a decided negative for global bond markets.  Each of those three factors certainly qualifies.

That’s also why the yield curve in the U.S. has inverted.  Any measure of U.S. current economic activity or financial system liquidity looks fine or even better than fine.  But the bond market looks like the world is in the middle of a global catastrophe. Why? Because global markets are interlinked.

You can’t just sit in Peoria, Illinois and say the fact that Danish banks like Jyske are now offering negative rates on 30-year mortgages doesn’t affect you.  It does. Some financial institution you use will have exposure to European bonds and when those bonds mature refunding them at negative rates is going to lead to losses.  You can’t just sit in Rexmont, Pennsylvania and say that the fact that assets in China’s financial system now represent more than half of the world’s GDP doesn’t concern you. If you have a 401k, it damn well should.

So, wake up, smell the coffee and lessen your holdings of equities.  The bond market and its inverted yield curve are telling you that economic growth is slowing—or perhaps even contracting.  The valuation of stocks, above all else, depends on estimates for rates of earnings growth. Anyone who is telling you “don’t panic” or “you can’t time the market” is a complete buffoon and should be ignored.  That includes many of the talking heads on CNBC, by the way.

Selling stocks into an economic downturn isn’t panic, it is just smart investing.  Practice it.

 

UC San Diego history prof’s book on fall of Rome’s democracy draws parallels to today

UC San Diego history prof’s book on fall of Rome’s democracy draws parallels to today

The parallels are striking: Rising income inequality. Partisan gridlock. The erosion of political norms and the loss of faith in public institutions. Angry populist uprisings.

Is America going the way of Rome?

“Mortal Republic,” by UC San Diego history professor Edward Watts, raises the question. The book has been garnering national media attention — The New Yorker, Smithsonian, Time, Vox, the New York Times — since its release in November.

“The lesson we can take away from the Roman example is that a republic doesn’t last unless you protect it,” Watts said in an interview. “It can and will die unless you ensure that it lives and thrives.”

Rome’s representative democracy lasted almost 500 years, still among the longest in history, and its checks and balances and other consensus-building elements were used by America’s founders as they drafted their own system of government.

But what the Romans put in place slowly crumbled and led to an autocrat taking power, and the early Americans understood that, too. The United States would be a republic, Benjamin Franklin once said, “if we can keep it.”

Watts, 43, has been teaching Roman history for about 20 years and he’s noticed a shift in his students’ interests away from the later empire to what its republic might teach us about the challenges facing democracies in the United States and elsewhere.

He found himself increasingly having similar conversations with family and friends. And he began thinking about the structural similarities between the Roman government when it started coming under strain and some of the things happening today.

So he wrote this book, his fifth.

The main purpose was to help readers “better appreciate the serious problems that result both from politicians who breach a republic’s political norms and from citizens who choose not to punish them for doing so,” he writes.

Watts cites complacency as a key danger.

“You take for granted the fact that you are going to live in a free society and you take for granted the fact that the republic that’s been there for hundreds of years is going to remain there for hundreds more,” he said.

“What that does is give you the false sense of assurance that you can take steps and make decisions that have short-term benefits for you as a politician or as a voter, but have long-term consequences that are quite negative for the system.”

Asking questions

Watts grew up in New Jersey and got his Ph.D in history at Yale. He taught for 10 years at Indiana University in Bloomington before coming in 2012 to UC San Diego, where he specializes in Roman and Byzantine history.

“I got interested in history because as a high school student I was first exposed to Roman culture and Roman history and really was shocked by how much we could learn from a society that is so distant from us,” he said.

That got him asking questions, trying to bridge the present and the past, and he found the process both challenging and rewarding.

“Mortal Republic” shows how Rome’s elected leaders who initially believed in national service and personal honor moved away from collaboration, compromise and consensus as the population expanded.

Wealth became concentrated in a small number of families who figured out how to manipulate an increasingly sophisticated economy, and they used their money to influence the political process. The fortunes of the middle class stagnated.

Attempts to address income inequality and ease public resentment moved slowly. Rome’s army was privatized, which eventually caused soldiers to put the interests of plundering commanders (and their own desires to share in the loot) ahead of their country.

Over the course of a century, starting in about 130 B.C., outbreaks of economic populism grew increasingly violent. Government rules were broken, traditions ignored, the notion of a common good trampled. Immigrants were disparaged. Politicians used their own militias to intimidate opponents, and when that didn’t work they sometimes turned to assassinations.

Eventually came civil war, and the republic was done. Romans traded liberty for the stability promised by the autocracy of Augustus.

“Above all else, the Roman republic teaches the citizens of its modern descendants the incredible dangers that come along with condoning political obstruction and courting political violence,” Watts writes. “Roman history could not more clearly show that, when citizens look away as their leaders engage in these corrosive behaviors, their republic is in mortal danger.”

Because of when his book came out, some online-forum commentators have dismissed it as a thinly veiled jab at President Trump, whose two years in the White House have been marked by a steady upending of the status quo.

Watts was writing the book during the 2016 campaign, so Trump was certainly on his mind. But he said the president wasn’t the main target.

Political, not partisan

Like most college historians, Watts is cautious about going too far in comparing and contrasting what happened 2,000 years ago to what’s going on today.

“You can’t take a political figure like Trump or Pelosi or whoever and say there’s a Roman example and this is how we understand this person,” he said.

Instead he hopes readers will see that his book “gives us a set of tools to think about the American republic as something that has particular qualities, and it allows us to imagine courses of action that allow us to advocate for the system,” he said. “So in that sense, I think the book is both highly political and not partisan. I hope that it gives us a way to speak for the larger concern about our political system.”

His own view is that “we are in a dangerous political process right now. I think that we’re in the middle of something, the end of the beginning maybe.”

But he also thinks “we have time to right the ship” if Americans can “again embrace what makes our republic work, and defend it.”

That means being willing to support a politician’s policies while also objecting to his or her methods, Watts said. It means refusing to allow governance be a zero-sum game where one side wins and the other side loses.

“I think that’s one of the profound departures we have in the United States from what a republic is supposed to do,” Watts said. “In a functional republic, you don’t have politicians playing exclusively to their base and disregarding everybody else.”

He’s been heartened by the responses to the book from critics and other readers who think it “offers a way we can think positively about steps we can take to maybe correct the trajectory of our political life.”

Will we take them?

“I won’t say that I can guarantee that will happen,” he said. “But I think there is a path forward that has a positive outcome. The challenge we have is to understand what that path is, and decide if that’s what we as a society want.”