Mr President, the FBI is not your personal police force

It’s bad enough that the president thinks he can influence and investigation of himself. Now he thinks he gets to choose individual cases to prosecute! We are well down the slippery slope and it’s only a matter of time, especially if Trump wins a second term, that the FBI stops resisting his efforts to interfere and investigate his political opponents, business enemies and press adversaries.

Today’s best news articles

Rather than scour the internet for all the best news, I’m bringing it to you in condensed form, with a little added editorial. The last one is my favorite.

An editorial on USAToday thinks Bannon’s banishment is scary for the American people because he was disloyal rather than bad at his job (which he was). The thing is, that defines modern conservatism. They’ve literally trampled almost every principle they hold. Even the holy grail of abortion was not off limits in electing the historically pro-choice Trump. But the one thing they absolutely won’t abide is disloyalty. You can be a pervert, sex offender, waver on traditional positions, even be corrupt. They’ll come out swinging to defend you. But if you show disloyalty they’ll dump you like the Dixie Chicks.

Great article from Politico Magazine on how democrats need to be more inclusive when it comes to divisive issues like guns and abortion. The GOP is off on a radical agenda driven largely by people who are turned off by democratic positions on these issues (in addition to some cultural differences). As both parties get more extreme in reaction to the politicians we hate (Obama and Trump) it would be easy to abandon the middle ground. That’s fine if you want to make a statement. But it hasn’t been working so well to get a governing majority to actually make a difference. It’s easy to dismiss the Trump election as an aberration, but the GOP has controlled the House for almost 8 years and have a governing majority in the vast majority of states. Democrats need to ask themselves if they want to be idealogically pure or advance their agenda.

The GOP again shows its inability to govern and may skip passing a budget altogether. Just…incompetent. This not going to end until the GOP fears losing general elections more than getting primaried. That’s the real power of gerrymandering, far more than who controls congress.

Climate Change and Global Warming are being scrubbed from government websites and documents. Some is supposedly censorship or pressure from above, but my take is that most of it is just budget politicking. If you want your budget expanded (or not cut) you don’t say that you’re working on the thing the administration very publicly wants to cut.

FiveThirtyEight has a great article on the different political camps and what they want in the immigration debate. Traditionally, the republicans scared of being too friendly to immigration have held off a deal. Now liberals are starting to push on their leaders to stay away from deals too friendly to republicans.

Last but probably most interesting: Corporations are DESPERATE to keep their hard fought tax cuts and are doing anything they can convince people that it benefits them directly. Lots of companies, including my own, have made very visible pronouncements that the tax cuts will increase wages, bonuses or 401k contributions. Some of these are certainly genuine. Some are likely opportunistic ways to give public credit to the tax cuts for things that were going to happen anyway. But if you’re benefiting from billions a year in tax cuts then spreading around 10 million to make it popular is just good math. I don’t think Dems will easily be able to raise those taxes again and it’s likely this will improve the popularity of the bill. But math is math and at some point we have to balance the budget. We either gut medicare/medicaid or we raise taxes. That’s really the only options. I think what this does do is open the door for two new types of taxes: 1) a carbon tax and 2) a Value Added Tax (VAT). Considering that we based our 21% tax rate on Europe corporate taxes and Europe pays both of those taxes, that seems fair and competitive to me.


Democrats should not be afraid of this tax bill

Looking over the tax bill, I think democrats should continue to punish it in the press, but privately hope the GOP passes it. Yes, most of the benefits go to the rich, and it will blow up the deficit even more. But those are short term concerns.

The truth is that the GOP position on taxes vs. deficits has been dodging reality for some time. But reality can only be avoided for so long. While there’s a small risk that they’ll financially ruin us like Greece, the US has far more levers for balancing the budget, namely fairly low taxes. More likely is that the demands for balancing the budget will eventually require more taxes, and this tax bill sets that possibility up.

Most of the benefits in this tax bill go to the rich, and ironically that’s the tax group that’s easiest to raise taxes on politically. Much of that can be reclaimed. But more than allow its repeal, the GOP has opened paths for new taxation. Their argument that the corporate tax rate needs to be at 20% to compete with international standards is correct. But it misses a huge point. In most of those international competing countries, the 20% rate is augmented by a Value Added Tax (VAT). Raising the 21% rate will be politically difficult, but the VAT could be a whole new ball game for tax revenue. And it also makes long term flexibility on taxes easier because raising it from, say 5%, to 6%, is easier than raising taxes on the general population, and it’s harder to avoid than income taxes. This tax was already getting serious consideration. I think this breaks the dam. The biggest obstacle is overcoming the opposition from the rich who pay the donations for politicians. But that’s not enough in the long run.

There are also some other positive changes. It limits mortgage interest deductions and state/local tax deductions without completing eliminating them. This raises revenue without hurting your average customer. Yes, it hurts high housing cost areas, but it also depresses some of those crazy high housing prices, which is a good thing in my opinion. And there’s no reason the government should subsidize those things in the long run.

Meanwhile, most of the really bad ideas are gone, such as taxing grad student tuition. The only real turd in the bill is the tax rate for pass through businesses. It’s at serious risk of being gamed, and despite trying to avoid the same disaster than happened in Kansas, it’s unlikely they’ll be able to take out all or even most loopholes that rich people will use to take advantage of the tax.  Even there though, one has to wonder whether just conventional wisdom will eventually win out if/when this gets gamed.

In the meantime, the GOP will be exposed even more for being corporate lackeys and billionaire lap dogs. The dems have to be secretly jumping for joy.

What the heck are republicans thinking?

I just assumed that the ridiculousness of the GOP tax cut plan would eventually catch up with them and they would either abandon it, or more likely, make it less ridiculous. But that hasn’t happened.

They’re on the verge of:

  • kicking millions off their health insurance
  • destroying graduate degree programs in critical fields like science by making grad students pay taxes on their tuition
  • eliminating medical for the sick and classroom deductions for teachers
  • eliminating or reducing the state and local taxes deduction
  • potentially driving smaller mortgage lenders out of the market with an obscure change to how they’re taxed on revenue streams
  • hurting renewables investments by companies by making it less attractive to invest in them
  • raising taxes slowly over time for most americans as the tax brackets would become tied to the lower chained CPI rather than the CPI
  • Adds another $1.5T to our deficit, assuming it produces the economic growth they claim, PLUS the cost of interest
  • more, more more…

Some of these things will change. But the basics are this. They’re stripping these benefits because they want to pay for lower corporate taxes and elimination of the estate tax. The corporate tax cut will cost $1.1T and the estate tax will cost $300B. That’s $1.4T out of a $1.5T tax bill. The rest is just window dressing. This is what this tax bill is all about.

The argument on corporate taxes has always been that we could raise revenue by cutting them. And that’s true, by cutting them to…maybe…28%. So why have republicans raced past that number and refused to budge?

Think for a moment about who they’re serving. If you listen they’ll tell you.

“My donors are basically saying, ‘Get it done or don’t ever call me again,'” the New York Republican told The Hill.

Sen. Lindsey Graham said the “financial contributions will stop” if they didn’t pass tax reform.

“The most excited group out there are big CEOs, about our tax plan,” the president’s chief economic advisor said on CNBC.

Keep in mind, in this day and age, a single happy or pissed off donor can single handedly keep a challenger in or out of a race. We have created a system where we have given so much power to the rich that republicans don’t feel like they can afford to say no to them.

Republicans are rushing at breakneck speed to get this passed before anybody can scrutinize it, and I think many have stayed on the sidelines waiting for this to fix itself. But republicans aren’t going to change it until they fear voters more than they fear donors.



The Internet meets GOP “reality”

I’ve been steaming about Net Neutrality for a week now. I think I’m as upset about this as about anything Trump has done so far. I’m not sure why. Despite prognostications that the Internet will suddenly drastically change without Net Neutrality, it’s pretty unlikely.

Yes, ISP’s have tried to throttle traffic in the past — Netflix seems to be a particular target — but I don’t think it’s likely to happen on a wide scale, at least anytime soon. First, the optics of that would be terrible and people would call for a return of net neutrality and this would be an ultimate loss for ISPs. Second, it’s not as if you won’t be able to get Netflix, or Google or Amazon or other companies overnight, and those companies could pay anyway.  Two things would happen without net neutrality: 1) prices for faster lanes would get passed onto consumers and 2) startups would have a harder time competing.

Those are both bad, but they miss the point. Because despite the argument, this isn’t actually about Net Neutrality for the ISPs. This is about price regulation. See, when the FCC was denied authority to enforce Net Neutrality via their old framework, they reclassified ISPs under a different regulation, which essentially classified them as monopoly telephone companies. This gives the government the ability to control way more than net neutrality, most notably by controlling prices.

Now, ISPs are about the most hated companies in the country. They’re more hated than any company since, well, the old telephone monopolies. Terrible service, inflated prices and a poor product tend to do that. I think ISP’s are terrified that the government will step in and say “you don’t get to charge $50 for broadband that’s so slow it doesn’t actually qualify under the definition of broadband.”

So maybe ISPs are right to be scared. We can leave the debate for whether they SHOULD be regulated for another time. But I think what’s bothering me so much is just the sheer audacity of the lies they’re telling to make it even slightly palatable to their base. Let’s be clear, this is really unpopular. The lies are not intended to convince everyone they’re right. They’re just intended to give the conservative media a point they can defend so they have SOME support in their corner.

Let’s be clear. Nobody believes that telling monopolies and duopolies that they can’t discriminate against websites that consumers are trying to reach is “micromanaging the internet.” The “analyses” showing that broadband investment is down are transparently slanted to show a trend that isn’t there.

The fact is, this is just another example of President Moneybags selling out to rich donors and lobbyists and acting against the interests of Americans. And as long as he can keep his base focused on guns, gays, abortion, God and immigration, he can get away with whatever the hell he wants. I wonder if they’re ever stop buying it.