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Elections

House Speaker Paul Ryan, Ro-Wis., speaks about tax reform on Capitol Hill in Washington, D.C. (Photo: Reuters)

House Speaker Paul Ryan, Ro-Wis., speaks about tax reform on Capitol Hill in Washington, D.C. (Photo: Reuters)

On Tuesday, a special election in Ohio’s 12th Congressional District is being held to replace Republican incumbent Patrick Tiberi. On October 19, 2017, Rep. Tiberi announced that he would leave Congress before January 31, 2018, to lead the Ohio Business Roundtable.

The National Republican Congressional Committee (NRCC) and Republican National Committee (RNC) have decided to make tax reform the center of their midterm pitch to voters. The RNC and the president’s campaign recently transferred $8 million to the NRCC to make that pitch.

Demographically speaking, Ohio 12 is an ideal district and the special election is an ideal time to test the Republican’s tax reform pitch to voters before the 2018 midterm elections.

In 2016, President Donald Trump crushed Hillary Clinton in the historically razor-thin battleground Buckeye State, 51.69% to 43.56%. That compares to the 2.98-point loss Mitt Romney suffered against Barack Obama in 2012, and the 4.19-point loss John McCain suffered in 2008.

However, in Ohio 12, each party’s share of the vote and the overall margin didn’t differ much at all from either 2012 or 2008.

In 2016, Mr. Trump carried Ohio 12 with 53.2% of the vote, compared to 41.9% for Mrs. Clinton. Mr. Romney garnered 54.4% of the vote in 2012 and Mr. McCain, 53.7%. Mr. Obama got 43.9% in 2012, down just a hair from the 44.8% he got districtwide in 2008.

The district is demographically geared more towards the traditional GOP coalition, not the Trump coalition. In 2016, Rep. Tiberi won reelection with 66.6% of the vote. In 2014, he won 68.1% of the vote. In 2012, he won 63.5% juxtaposed to Mr. Romney’s 54.4%.

The demographics get even better for those of us studying the impact of tax reform on voters.

The district is also a higher-income bracket than the media’s favorite portrayal of the average Trump voter. The median household income is $61,304, the high school graduation rate is 92.4% and the college graduation rate is 37%.

The Tax Foundation pegs average income in the district among those earning from $50,000 to $75,000 at $61,421. These workers got an average tax cut of $1,456 due to the Tax Cuts and Jobs Act (TCJA). Those making from $75,000 to $100,000 enjoyed an average tax cut of $1,936 due to the TCJA.

Consider the graphic below, courtesy of the Tax Foundation.

It’s clear. Working voters in this congressional district have benefited from the TCJA. Yet, according to a recent Emerson College Poll, 45% of voters in the district support the tax reform law, while 41% are opposed and 11% are undecided.

The poll, which was notably taken prior to the president’s rally in the district on August 4, found Democrat and Franklin County Recorder Danny O’Connor leading by just 1 point with 47% of the very likely vote. State Senator Troy Balderson was at 46%, and 7% of very likely voters were undecided.

Worth noting, as I tweeted, depending on which public or private internal poll, Rick Saccone was down by 4 to 8 points against Connor Lamb the weekend before the special election in Pennsylvania’s 18th Congressional District.

The president’s visit erased that deficit over that last weekend. While Mr. Saccone lost that race. He barely lost it. We have found the president’s rallies increase GOP voter enthusiasm.

I, as well as some others at Big Data Poll and elsewhere, have argued that tax policy has little impact on base enthusiasm juxtaposed to other issues. Republican base voters vote on what we call “liberty issues,” like immigration and health care.

While it certainly can’t hurt, the data indicate tax reform — even when billed as “cuts” instead of reform — should be part of a bigger economic message, and even secondary to one of the more voter-exciting liberty issues.

Further, Republican congressional candidates are fighting a lack of enthusiasm stemming from the party’s resistance to the president’ agenda, an agenda that won them such a historic election. Mr. Balderson isn’t holding President Trump’s coalition as solidly as Mr. O’Connor is holding Mrs. Clinton’s coalition.

The poll found voters who hacked Mrs. Clinton are breaking for Mr. O’Connor 95% to 3%, while those who backed President Trump are breaking for Mr. Balderson by a lesser margin, 89% to 7%.

That’s not from President Trump weighing down the party’s candidate. It’s quite the opposite.

Nevertheless, Buckeyes making between $100,000 to $199,999 backed President Trump over Mrs. Clinton by a 57% to 39% margin. These voters, with an average income of $132,146, got an average tax cut of $2,762.

If the Republican Party is bleeding voters from this demographic group, as so many have suggested, then tax reform doesn’t make a lot of sense as a cause. We will be watching this group, as well as non-college educated voters.

If Republicans are performing poorly in historically Republican districts like this, then it’s far more likely due to a growing disconnect between what Republican leaders think voters want them to focus on, and what voters actually tell us they want them to focus on.

UPDATE: Worth adding, GOP enthusiasm was roughly on par with Democrat enthusiasm until the failure to repeal ObamaCare. On the flip side, Democrat enthusiasm has been relatively flat.

Demographically, Ohio 12 is an ideal district

Economy

Workers assemble built-in appliances at the Whirlpool manufacturing plant in Cleveland, Tennessee August 21, 2013. (Photo: Reuters)

Workers assemble built-in appliances at the Whirlpool manufacturing plant in Cleveland, Tennessee August 21, 2013. (Photo: Reuters)

The U.S. manufacturing sector has enjoyed the strongest job growth over a 12-month period in more than two decades. In July, another 37,000 manufacturing jobs were added, the highest number for a single month since December.

The U.S. economy has added 327,000 manufacturing jobs over the past year, the sector’s strongest over a 12-month period since April 1995, when the number was 345,000.”

As People’s Pundit Daily (PPD) previously reported, manufacturing employment in the U.S. rose to a 9 1/2-year high in June. The number of American workers employed in the manufacturing sector rose to 12,713,000.

That was the largest number since December 2008, when manufacturing employment totaled 12,850,000 American workers.

While President Donald Trump made the manufacturing base the centerpiece of his campaign and MAGAnomics, the previous administration took the position that most of these jobs were destined never to come back.

Barack Obama even mocked the then-Republican candidate for pretending to have a “magic wand” to rebuild the manufacturing base. Manufacturing struggled on life support during the heavily-regulated post-Great Recession period under the Obama Administration.

That trend has been arrested, and reversed. The same has been true of the mining industry, even more-so than manufacturing.

Citing the Tax Cuts and Jobs Act (TCJA) — the president’s signature piece of legislation and the first overhaul to the U.S. tax code in 31 years — a record 95.1% of manufacturers this quarter registered a positive outlook for their company. That’s the highest level ever in the 20-year history of the Manufacturers’ Outlook Survey.

The National Association of Manufacturers (NAM) also said expectations for growth in investments, hiring and wages are reaching historic highs since the survey began in the fourth quarter (4Q) of 1997.

The first NAM Manufacturers’ Outlook Survey after President Donald Trump took office showed a “dramatic shift in sentiment.” The NAM survey found more than 93% of manufacturers feeling positive about their economic outlook, which at the time was the highest level ever measured.

Worth noting, industrial production increased 0.6% in June after falling 0.5% in May. Manufacturing output rebounded strongly, rising 0.8% in June and meeting the forecast.

At 107.7% of its 2012 average, total industrial production was 3.8% higher in June than it was a year earlier.

The U.S. economy has added 327,000 manufacturing

Policy

President Donald Trump touts "promises kept" A support tries to capture a photo/video of President Donald Trump President Donald Trump jokes with the crowd President Donald Trump touts record low unemployment for minorities during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People's Pundit Daily)

President Donald Trump touts “promises kept” A support tries to capture a photo/video of President Donald Trump President Donald Trump jokes with the crowd President Donald Trump touts record low unemployment for minorities during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People’s Pundit Daily)

I don’t like the tribal nature of American politics, in part because I get criticized for not playing the game.

I tell both groups that I care about public policy rather than personal or partisan loyalty. Not that this explanation makes either group happy.

Today, I’m going to give a “thumbs up” to the President for what he’s doing about car mileage regulations. Which means the first group will be happy and the second group will be irritated.

To be more specific, the Trump Administration is proposing to ease up on the CAFE (corporate average fuel economy) rules. The Obama Administration, working with California environmentalists, proposed to make these regulations far more costly. Trump’s people basically want to freeze the car mileage mandate at the current 37-miles-per-gallon level.

Here’s a look at the history of the CAFE standards.

Sam Kazman of the Competitive Enterprise Institute explained earlier this year why these regulation impose high costs. And deadly costs.

The federal government’s auto fuel economy standards have for decades posed a simple problem: They kill people. Worse, the National Highway Traffic Safety Administration has covered this up. …To call it a coverup isn’t hyperbole. CAFE kills people by causing cars to be made smaller and lighter. While these downsized cars are more fuel-efficient, they are also less crashworthy. …A 1989 Harvard-Brookings study estimated the death toll at between 2,200 and 3,900 a year. Similarly, a 2002 National Academy of Sciences study estimated that CAFE had contributed to up to 2,600 fatalities in 1993. …The Insurance Institute for Highway Safety, which closely monitors crashworthiness, still provides the same advice it has been giving for years: “Bigger, heavier vehicles are safer.”

The Trump Administration apparently was listening to Sam, and has decided to block future increases in the CAFE mandate.

Environmentalists are predictably upset, but the Wall Street Journal opined on this topic a couple of days ago and explained why it is good news.

The Trump Administration’s deregulation is improving consumer choice and reducing costs… Its proposed revisions Thursday to fuel economy rules continue this trend to the benefit of car buyers… Obama bureaucrats were acutely blind—perhaps willfully so—to economic and technological trends in 2012 when they set a fleetwide average benchmark of 54.5 miles a gallon by 2025. …Americans prefer bigger cars, which makes it harder for automakers to meet the escalating Cafe targets. …As prices rise to meet the new standards, consumers would also wait longer to replace their cars. The average age of a car is approaching 12 years, up from about 8.5 in 1995. Newer cars are more efficient and safer, so longer vehicle turnover could result in more traffic fatalities… Thursday’s Trump Administration proposal to freeze—not roll back—fuel economy standards at the current 2020 target of 37 miles a gallon. …Automakers also want to duck a prolonged legal tussle with California, which received a waiver from the Obama Administration under the Clean Air Act in 2013 to establish its own emissions standards and electric-car mandate. The proposed Trump standards would apply nationally.

Holman Jenkins of the WSJ also weighed in on the issue, pointing out that undoing Obama’s expansion of CAFE mandates will have no impact on the earth’s climate.

…the effect on climate change would be zero. The Obama White House at the time exaggerated by a factor of two the Environmental Protection Agency’s estimate of the effect on total emissions over the lifetime of the cars involved. It doesn’t matter. Two times nothing is still nothing. …Let’s remember the truth of Mr. Obama’s fuel-economy rules. He did not wander the balconies of the White House gazing far into the future when he drafted the 2021-25 fuel economy target of 54.5 miles a gallon. His flunkies, as documented in a House investigation, simply were looking for a impressive-sounding number to serve the administration’s political interests at the time. …in undoing Mr. Obama’s policies, Mr. Trump is doing nothing to hurt the climate.

Myron Ebell of the Competitive Enterprise Institute also wrote on the topic and noted that Trump’s policy will save about 1,000 lives each year.

…the administration has struck a blow for consumer choice that will be good news for drivers planning or hoping to buy a new car in the next decade. That’s because the mileage mandate is one of the main causes of rapidly rising vehicle prices. …Meeting ever more stringent fuel economy standards is driving up new vehicle prices. Sticker shock is thereby causing a lot of people to hang on to their current cars. The average age of all cars on the road is now at an all-time high of over 11-1/2 years. …Freezing CAFE standards will make new cars more affordable for millions of Americans and also allow many of them to buy bigger and hence even safer new models. How much safer will be hotly debated. The Transportation Department concludes that the proposed changes will prevent about 1,000 traffic fatalities a year. …For many people, fuel economy will still be the most important factor in choosing a new car. The good news for them is that the Trump administration’s action will in no way prevent them from buying a model that gets great gas mileage. The good news for everyone else is that the choice of models will be much wider than if the CAFE standard remained 54.5 mpg.

By the way, this isn’t simply a matter of saving lives.

After all, we theoretically could save thousands of lives by simply banning automobiles. In the world of sensible public policy, we make trade-offs, deciding if achieving a certain goal is worthwhile when looking at all the costs and all the benefits.

So it’s theoretically possible that a policy that leads to more premature deaths might be acceptable.

But CAFE fails even on that basis. As Marlo Lewis explained a few years ago, the policy both kills people and imposes net financial costs.

The bottom line is that Donald Trump just improved his grade on regulation.

Back in April, I gave him a B+ on regulation. But then he did something foolish in June that (if I recalculated) would have dropped him to a B. Now he’s probably back at a B+ because of the change to the CAFE rules.

Given what he’s doing on trade, he needs to boost his other grades as much as possible!

The Trump Administration proposed an easing up

Opinion

Closeup of Colorful plastic straws for drinking concept. (Photo: AdobeStock)

Closeup of Colorful plastic straws for drinking concept. (Photo: AdobeStock)

Since I focus on public finance, I think California is crazy because of punitive taxes and reckless spending policies. But I can understand why other people think California is crazy, period.

This is a state, after all, where politicians come up with bizarre ideas such as regulating babysitting and banning Happy Meals.

Not to mention banning other things as well.

So you won’t be surprised to learn that the Golden State is leading the way in attacking the horrible scourge of plastic straws.

Plastic straws are quickly becoming a takeout taboo. Starbucks has vowed to get its iconic green sippers completely off store shelves by 2020, while Seattle banned all plastic utensils, including straws, from bars and businesses city-wide earlier this month. San Francisco quickly followed suit this week and passed an ordinance that, once approved, will ban plastic straws beginning in July of 2019… It may seem as though the quarter-of-an-inch diameter drinking straw is the least of our worries. But environmentalists say the fight’s got to start somewhere. “We look at straws as one of the gateway issues to help people start thinking about the global plastic pollution problem,” Plastic Pollution Coalition CEO Dianna Cohen told Business Insider.

If I’m willing to claim earmarks are the gateway drug for big spending, then I can’t complain when other people come up with imaginative claims about other types of “gateways.”

In any event, there is a legitimate reason to be concerned about plastic.

Some straws drift out to sea, becoming just one more piece of the 79 thousand-ton colossal floating iceberg of trash called the Great Pacific Garbage Patch. Scientists who’ve studied the patch, a trash heap wider than two whole Texases that bobs somewhere between Hawaii and California, have discovered it’s essentially a watery pit of litter and illegal dumps that’s trapped in the ocean currents, and it is basically all plastic. …The anti-straw movement may have first picked up steam because…Texas A&M graduate student Christine Figgener…noticed something encrusted in the nose of one of the male turtles. …The team soon figured out it was actually a “plastic straw stuck in his nose,” and removed it, hoping the extraction might help give him some more breathing time on Earth.

But the people on the left side of the country are not actually solving this problem.

Plastic pollution is basically a problem caused by developing countries.

So the politicians in Seattle and San Francisco are making the Nanny State more intrusive without achieving anything.

A classic case of virtue signaling.

But look at the bright side. It’s already generated some great political satire.

Starting with this little girl.

I imagine the plastic straw will be a gateway for operating an unlicensed lemonade stand!

And if SWAT teams run out of harmless pot smokers to harass, they now have new target to justify their budgets.

And the gun grabbers will appreciate the importance of dealing with high-capacity straw dispensers.

Though it’s unclear how the left will deal with the danger of concealed straws.

Especially since some of those straw nuts will become dealers.

I’ve saved the best for last. For those old enough to remember OJ Simpson and the white Bronco, this image of a renegade toddler will bring back memories.

Remember, if you outlaw straws, only outlaws will have straws.

Next thing you know, they’ll try to outlaw tanks.

It’s a slippery slope!

California is leading the fight against the

Policy

Global Welfare State Graphic

Global Welfare State Graphic

Last September, I shared some very encouraging data showing how extreme poverty dramatically has declined in the developing world.

And I noted that this progress happened during a time when the “Washington Consensus” was resulting in “neoliberal” policies (meaning “classical liberal“) in those nations, confirmed by data from Economic Freedom of the World.

In other words, pro-market policies were the recipe for poverty reduction, not foreign aid or big government.

Sadly, the Washington Consensus has been supplanted. Bureaucracies such as the International Monetary Fund, the United Nations, and the Organization for Economic Cooperation and Development are now pushing a statist agenda based on the bizarre theory that higher taxes and more spending somehow produce prosperity.

To add insult to injury, some people now want to rewrite history and argue that free markets don’t deserve credit for the poverty reduction that already has occurred.

Esteban Ortiz-Ospina, writing for Our World in Data, wants readers to conclude that redistribution programs deserve credit.

…the share of people living in extreme poverty around the world has fallen continuously over the last two centuries. …many often say that globalization in the form of ‘free-market capitalism’ is the main force to be thanked for such remarkable historical achievement. …this focus on ‘free-market capitalism’ alone is misguided. …Governments around the world have dramatically increased their potential to collect revenues in order to redistribute resources through social transfers… The reach of governments has grown substantially over the last century: the share of total output that governments control is much larger today than a century ago.

And for evidence, Mr. Ortiz-Ospina included this chart.

 

I shared a version of this data back in June, asserting that the explosion of social welfare spending made this “the western world’s most depressing chart.”

So does Ortiz-Ospina have a compelling argument? Does poverty go down as welfare spending goes up?

Nope. Johan Norberg points out that there is a gaping flaw in this argument. An enormous, gigantic hole.

Wow. This isn’t just a flaw. It’s malpractice. It’s absurd to argue that welfare spending in developed nations somehow led to poverty reduction in developing countries.

I hope Mr. Ortiz-Ospina is just an inexperienced intern, because if he really understands the data, one might be forced to conclude that he’s dishonest.

But let’s set that issue aside. Johan closes his video by explaining that poverty in rich nations declined before modern welfare states. I want to expand on that point.

Johan cited Martin Ravallion, so I tracked down his work. And here’s the chart he put together, which I’ve modified to show (outlined in red) that extreme poverty basically disappeared between 1820 and 1930.

And guess what?

That was the period when there was no welfare state. Not only is that apparent from Our World in Data, it’s also what we see in Vito Tanzi’s numbers.

Here’s Tanzi’s table, which I first shared five years ago. And I’ve circled in red the 1880-1930 data to underscore that there was virtually no redistribution during the years poverty was declining.

The bottom line is that poverty in the western world fell during the period of small government. Yet some people want to put the cart before the horse. They’re making the absurd argument that post-1950s welfare spending somehow reduced poverty before the 1930s.

That’s as absurd as Paul Krugman blaming a 2008 recession in Estonia on spending cuts that took place in 2009.

P.S. For those who want U.S.-specific data, it’s worth noting that dramatic reductions in American poverty all occurred before Washington launched the so-called “War on Poverty.”

There is no relationship between welfare spending

Policy

Then-California Attorney General Kamala Harris speaks at the Center for American Progress' 2014 Making Progress Policy Conference on November 19, 2014 in Washington. (Photo: Reuters)

Then-California Attorney General Kamala Harris speaks at the Center for American Progress’ 2014 Making Progress Policy Conference on November 19, 2014 in Washington. (Photo: Reuters)

There’s a problem in California. No, I’m not referring to the punitive tax laws. Nor am I talking about the massive unfunded liabilities for bureaucrat pension.

Those are big problems, to be sure, but today’s topic is the state’s government-created housing crisis. The population keeps expanding, but local governments use zoning laws to restrict development of new homes and apartments.

And guess what happens when supply is constrained and demand keeps climbing? Even a remedial student in Economics 101 will probably understand that this is a recipe for ever-rising prices.

The solution, of course, is to expand the housing stock. Build more homes, apartments, and condos.

But local governments don’t like that option because existing homeowners (who vote) benefit from scarcity-induced increases in home values. And environmentalists also don’t like any development because of ideology.

Moreover, why fix the problem when politicians in Washington are willing to promote crackpot ideas. And that’s a very apt description of Senator Kamala Harris’ scheme to subsidize rental payments.

Why is this a crackpot idea? Because prices go up in every sector of the economy that is subsidized. This is why health care keeps getting more expensive. It’s why higher education keeps getting more expensive.

And if Washington politicians decide to subsidize rent, the same thing will happen.

Writing for National Review, Jibran Khan explains why Harris has the wrong solution for the wrong problem. He starts by explaining why there’s a housing shortage.

Harris’s subsidy won’t improve the situation, and could even make things worse by drawing attention away from actual solutions. The Bay Area’s rent crisis is driven by a drastic shortage in housing. Strict rent control in San Francisco and “NIMBY” (not in my backyard) zoning policies have ensured that the area constructs only a fraction of the housing it needs. The San Francisco metro area added 373,000 new jobs between 2012 and 2017, but it allowed the construction of only 58,000 new units of housing. …Per Lawrence Yun, an economist who studies housing trends, the norm is for one housing unit to be built for every two jobs created. In the San Francisco area, there is less than one unit built for every six jobs created. …under Harris’s proposal, the currently homeless would remain homeless, while renters would receive some very short-term relief at the cost of other taxpayers.

He then explains why a subsidy will lead to higher rents, and a windfall for landlords.

Why would the relief be short-term? Because as landlords become aware that renters are receiving a subsidy, they will simply raise rents by the amount of the subsidy. The cost will be the same for the renters — who today are lining up for a chance to rent, showing that they are willing to pay it. In the end, then, this would be an effective subsidy for landlords, not renters.

Which, as mentioned above, is exactly what’s happened in other sectors that have received subsidies.

It’s not just libertarians who understand that Harris will make a bad situation worse.

Matt Yglesias is hardly a small-government zealot. He’s accused me, for example, of being insane and irrational because of my libertarian views. But we both agree that the real problem in California is government rules that limit development.

And I assume he also would agree that Harris’ plan will wind up enriching landlords rather than helping renters.

So why, then, is Harris proposing such a destructive policy?

There are three possible answers.

  1. She’s ignorant, and her staff is ignorant. Simply stated, there’s no understanding of indirect effects. Bastiat would be very disappointed.
  2. She’s malicious. In other words, she’s smart enough to realize the policy is bad, but she doesn’t care. Call this the Venezuela approach.
  3. She’s ambitious. In this scenario, she has no intention of pushing a bad idea, but she thinks it’s a good way of getting votes from renters.

I assume #3 is the right answer.

Regardless of her motives, she’s doing the wrong thing.

I’ve shared this chart on many occasions because it does a great job of showing that subsidized sectors are characterized by rising prices.

Give politicians enough leeway and maybe the entire economy can be dysfunctional!

P.S. I’m not being partisan. Republicans are quite capable of supporting very stupid policies in exchange for votes or campaign contributions. Just look at the GOPers who support the Export-Import Bank, Fannie-Freddie subsidies, or ethanol handouts.

P.P.S. Needless to say, I also object to the Harris scheme because it would make the tax code an even bigger mess. I realize it’s unlikely that I’ll ever see a simple and fair flat tax, but is it too much to ask for politicians not to make the system even worse?

The Rent Relief Act pushed by Kamala

Opinion

President Donald Trump jokes with the crowd President Donald Trump touts record low unemployment for minorities during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People's Pundit Daily)

President Donald Trump jokes with the crowd President Donald Trump touts record low unemployment for minorities during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People’s Pundit Daily)

By starting a trade war, President Trump is playing with matches in a gunpowder factory. Other nations are retaliating, creating the risk of escalating tit-for-tat protectionism.

But is that really what’s happening? Is it possible that the President instead is playing hardball to get other nations (who generally have more trade barriers than America) to open their markets?

Depending on who you ask, you get different answers to those questions.

Steve Moore of the Heritage Foundation lavishes praise on Trump for being a de facto proponent of free trade.

Trump and the European Union reached a handshake deal that is designed to LOWER tariffs on both sides of the Atlantic. They agreed to shoot for zero tariffs on both sides of the Atlantic. ‎ Sounds like freer and fairer trade to me. …It gets better: the two sides also agreed in principle to find ways to combat “unfair trading practices, including intellectual property theft, forced technology transfers, industrial subsidies and distortions created by state-owned enterprises.” …Before Trump came on the scene most nations denied that this cheating and stealing were even happening.  Any progress in ending these unfair trade practices is an indisputable victory for the U.S.  Well done, Mr. President. You’ve accomplished something in 18 months that no president has in at least 30 years. …We have here more evidence that the American president is the master negotiator. …the key point: Trump’s tariffs are meant to force other countries to LOWER theirs.

Likewise, Marc Thiessen of the American Enterprise Institute argues in the Washington Post that Trump is playing a clever game designed to produce free trade.

Trump was roundly criticized for publicly berating allies over their trade practices and provoking a needless trade war. Well, once again, it appears Trump is being proved right. On Wednesday, he and European Commission President Jean-Claude Juncker announced a cease-fire in their trade war and promised to seek the complete elimination of most trade barriers between the United States and the European Union. …Zero tariffs. Wednesday’s breakthrough with the European Union shows that, contrary to what his critics allege, Trump is not a protectionist; rather, he is using tariffs as a tool to advance a radical free-trade agenda. …Trump’s hard-line trade strategy is being vindicated. …the E.U. negotiating zero tariffs… That’s three-dimensional trade chess. …If Trump succeeds in using trade wars to bring down European and Chinese trade barriers, he may end up being one of the greatest free-trade presidents in history.

Claude Barfield of AEI doesn’t agree with his colleague that Trump is a closet free trader.

…one cannot be counted a free trader if one subscribes to the flat-earth equivalent theory that trade deficits (or surpluses) can be changed dramatically by trade policy rather than by changes in a nation’s savings/investment ratio — or indeed that bilateral trade deficits are evidence of “unfair” trade practices or the US being “raped” by its trading partners. One cannot be a free trader if one supports, as the president does, a “Buy American” policy, no matter the ultimate cost to US businesses and consumers. One cannot be a free trader if one prostitutes the concept of national security by invoking it for purely protectionist trade actions against historical allies. One cannot be a free trader, or free market leader, if one compounds protection with outsized subsidies, as the president contemplates with a $12 billion farm bribe. …Thiessen made a valiant effort to craft a silk purse out of sow’s ear. But, given their vehement protests over Trump’s tariffs, it seems that even pig farmers aren’t buying it.

Veronique de Rugy also has a very jaundiced view of Trump’s actions on trade, explaining that higher tariffs aren’t the right route to achieve free trade.

…trade…is one policy area where he’s been remarkably consistent over the years. That’s why I’m always surprised whenever articles, TV commentators, or friends in casual conversations argue that his real goal in boldly imposing unilateral tariff hikes is to achieve freer trade. …Nothing in what the president has ever said suggests that he’s anything but a diehard mercantilist. …unilaterally increasing tariffs against other nations has never been an effective way to get them to lower theirs. Other government officials, often protectionists themselves, use the attack as an excuse to raise their own tariffs even higher to protect domestic interests. Retaliation from Mexico, Canada, China, and the European nations is proving this point once again. …Historically, the only way the United States has managed to get other countries to drop their trade barriers has been through multilateral agreements where everyone commits to behaving better. It is not a perfect process, but it beats pretending that Trump’s protectionism will do any good.

So who’s right, the Thiessen-Moore team or the Barfield-de Rugy team?

For what it’s worth, I hope Thiessen and Moore are right, but I’m afraid that Barfield and de Rugy have a stronger argument (as illustrated by this scale that I recycled from two days ago).

Trump repeatedly has demonstrated that he has no idea how trade works. He actually thinks a trade deficit is somehow evidence of economic defeat. But that’s nonsensical. The “deficit” in trade only exists because foreigners are anxious to invest in the U.S. economy. In other words, it’s really a sign of a capital “surplus.”

Veronique mentioned this in her column, and also noted that this won’t change in a zero-tariff world. Indeed, the so-called deficit would probably increase since America would become an even more attractive place to invest.

Trump’s obsession with increasing exports relative to imports is misguided. The imports are a means to achieve what Mark Perry of the American Enterprise Institute calls “job-generating foreign investment surpluses for a better America.” That also means that a world with no tariffs will not necessarily translate to a lower U.S. trade deficit. …Thus the president would likely hate the outcome of a zero-tariff world, putting us back where we are today.

Moreover, let’s not forget that the tax reform legislation – particularly the lower corporate rate – also will make America more attractive to foreign investors. And that also will lead to a higher trade deficit.

So unless Trump learns that a trade deficit is not a bad thing, he’d probably react by pushing for more protectionism instead of more trade liberalization.

That being said, I’m going to conclude with some optimism. Not because I think Trump wants the right thing or believes the right thing, but rather because he a) doesn’t pay attention to details, and b) values appearance over substance.

Consider what happened with the big spending battle with Congress last year (which actually dragged into this year). Trump’s big issue was illegal immigration and building a wall, yet he capitulated to a spending bill that basically ignored his demands. Yet he signed it because he decided that more defense spending could be portrayed as a victory (even though the bill was larded with additional domestic spending).

Maybe the same thing can happen on trade. In this fantasy scenario, he’ll huff and puff about the trade deficit and then wind up agreeing to a good pact because the other side makes some splashy concession that Trump can portray as a win.

At least that’s what I hope will happen. Especially since I don’t enjoy thinking about the alternative outcome.

Is it possible President Trump is playing

Politics

U.S. President Donald Trump, flanked by U.S. Senator Dick Durbin (D-IL) and Representative Steny Hoyer (D-MD), holds a bipartisan meeting with legislators on immigration reform at the White House in Washington, U.S. January 9, 2018. (Photo: Reuters)

U.S. President Donald Trump, flanked by U.S. Senator Dick Durbin (D-IL) and Representative Steny Hoyer (D-MD), holds a bipartisan meeting with legislators on immigration reform at the White House in Washington, U.S. January 9, 2018. (Photo: Reuters)

A Bush-appointed federal judge ruled the Trump Administration must fully restore Deferred Action for Childhood Arrivals (DACA). U.S. District Judge John Bates in Washington, D.C., said he would stay the order until August 23.

The stay gives the administration time to decide whether to appeal. Judge Bates was appointed by George W. Bush in December 2001.

Despite strong opposition from the public, Barack Obama moved forward with DACA in 2012 and, in 2014, expanded it with Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA). The latter was deemed unconstitutional, with DACA on the chopping block.

DAPA was struck down by the Fifth Circuit and that decision was affirmed by the U.S. Supreme Court before the appointment of Justice Neil Gorsuch. The newest appointment to the Court would undoubtedly rule against DACA if given the chance.

On multiple occasions, the U.S. Congress rejected similar proposals, prompting Mr. Obama to do what he himself had said more than 20 times he did not have the authority to do.

“In other words, the executive branch, through DACA, deliberately sought to achieve what the legislative branch specifically refused to authorize on multiple occasions,” Attorney General Jeff Sessions said. “Such an open-ended circumvention of immigration laws was an unconstitutional exercise of authority by the Executive Branch.”

Deferred action is a use of prosecutorial discretion to defer removal action against an individual for a certain period of time, though it does not provide lawful status.

Under DACA, no less than 700,000 young adults, who are often referred to by Big Media as “Dreamers,” were granted deferred status pertaining to deportation and given work permits for two-year periods, after which they must re-apply to the program.

In 2017, Attorney General Sessions announced that the Trump Administration would rescind DACA. Lawyers at the Department of Homeland Security (DHS) also told then-Secretary John Kelly, who is now White House Chief of Staff, the Obama-era policy is unlikely to hold up to legal scrutiny.

“Our collective wisdom is that the policy is vulnerable to the same legal and constitutional challenges that the courts recognized with respect to the DAPA program, which was enjoined on a nationwide basis in a decision affirmed by the Fifth Circuit,” Mr. Sessions said. “The Fifth Circuit specifically concluded that DACA had not been implemented in a fashion that allowed sufficient discretion, and that DAPA was ‘foreclosed by Congress’s careful plan.’”

In January of 2018, President Trump shocked his base and Democrats by releasing an immigration plan that would’ve provided a pathway to citizenship for 1.8 million “dreamers” currently residing in the U.S. illegally. The proposal was unveiled ahead of schedule.

But the 4-pronged plan, which most conservative lawmakers viewed to be too generous, was rejected by the Democrats. Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif., wanted a wedge issue to excite the base before the midterm elections.

Addressing the issue was a secondary concern to the congressional minority, who also don’t want to see an end to chain migration or unfettered illegal immigration at the U.S. southern border with Mexico.

Unfortunately, recently obtained records revealed 59,786 DACA recipients have been arrested while in the U.S., roughly 7.8% of all who have been approved under the program since it was created in 2012.

DHS also revealed an astonishing 53,792 DACA recipients were arrested before their most recent requests for a “grant of deferred action” were approved, and another 7,814 DACA recipients were arrested after their request was approved.

Two other liberal federal courts in California and New York had previously ruled against the Trump Administration, while the initial lawsuit filed in Texas federal court is seeking to end DACA.

A Bush-appointed federal judge ruled the Trump

World

Authorities monitor the Iran protests. (Photo: Tsarizm)

Authorities monitor the Iran protests. (Photo: Tsarizm)

On Friday, (Aug. 3, 2018, local time) the people of Tehran, Karaj, and Mashhad, once again began protesting against the clerical regime. The protests continued into the weekend.

The cities of Ghahdarijan and Shahin Shahr in Isfahan province and Andimeshk in Khuzestan joined the protests, according to sources in Iran who spoke with Tsarizm.

In the past few hours, youths in the city of Mashhad have been chanting “Death to the dictator” and launching their demonstration.

At the Vali Asr Crossroad in Tehran, protesters were chanting “Death to the dictator” and beginning their courageous protests. They’re also heard chanting: “Iranians, shout out for your rights” & “Cowards, cowards” to the regime’s repressive security forces.

Youths in Gohardasht of Karaj, located to the West of Tehran, were also demonstrating and chanting “Death to the dictator,” as well as “Iranians rather die than live in shame” and “Proud Iranians, support, support.”

They’re also shouting towards the regime’s repressive forces and chanting: “We may die but we’ll take Iran back.”

That was the fourth consecutive day of protests taking place in numerous cities across Iran.

The protests have started over economic grievances, their nature has quickly turned into anti-government demonstrations. In previous days, protesters have clashed with security forces on several cities.

On Friday, (Aug. 3, 2018, local time)

Opinion

Social media graphic concept. (Photo: AdobeStock)

Social media graphic concept. (Photo: AdobeStock)

The mainstream media and social media giants once again have been banging the drum to silence the free speech of bloggers on the Internet, by suggesting they are the only “legitimate press.” A number of blogger and podcasters have been “de-platformed” recently, including the well-known Alex Jones Show.

Most people pay little attention to what is being said on this issue, but I can tell you, that the message of censorship is probably the most serious threat to American liberties in many years and would do far more damage to this country than even the much-lamented Affordable Care Act.

People who blog as a hobby, or write for a living, have come under the scrutiny from the left for a variety of reasons. But the primary reason is that it threatens their political agenda, and acts as a counterweight against their attempt to seize power in government.

For years, the media has always acted as the watchdog of government. Who can forget the actions of Woodward and Bernstein? Or the tirades of columnists against Ronald Reagan. Even Bill Clinton, who was a media darling, was torn apart by many magazines and columnists for the salacious details of Lewinsky affair and his attempt to deny justice to Paula Jones.

However, in the last 8 years, the media has not just moved to the left, it has become a tool and pawn of the left.

In fact the ABC chief news correspondent, George Stephanopoulos , is a former Clinton adviser. NBC sells Obama ‘action figures’ in its own gift shop, and CBS is so comfortable with its own liberalism that if often steps on journalistic ethics in order to slant its stories (remember Dan Rather and the Bush affair?).

And should one of them point a finger of accusation at a corrupt Obama White House, as the now deceased Helen Thomas did, they quickly find themselves on the pavement. No one who understands politics was fooled by that whole affair. Right wingers didn’t get rid of Helen Thomas, the left did. The man that filmed that tape of her complaining about Israel was a Clinton crony, not a conservative.

So when bloggers write stories and columns and take a different approach, it threatens to shine a light on the dirty dealings of the left and threatens their ability to push an unpopular and socialist agenda through Congress.

The left is very aware that Congress is highly sensitive to public pressure and the will of the American people, and is also sensitive to the effect that outlets they can’t control, such a radio and the Internet (at least not yet) can have on Congressional votes.

I dare say, if not for the voice in the dark of internet radio and the bloggers, we would be looking at a much different America than we do now. It also takes away from their readership of their failing newspapers, and undermines the ability to generate revenues from its state sponsored propaganda machine.

It was Hillary Clinton herself that blamed the Benghazi attack on a YouTube video, and her election loss on the voice of alternative media. The mainstream media and the leftists that control social media are trying to paint bloggers and free writers as hate mongers and racists.

Why?

Because it is probably the most hateful thing short of child molestation that you can accuse another person of. The left wants to break right wing radio and right wing bloggers. They don’t see them as people who are exercising their rights of free speech, they see them as an impediment to their radical agenda to reinvent America as a socialized state.

They will try to do this through eventual expansion of the FCC’s powers and block the transmission of free speech through their legislation of the Internet. They will make loud speeches about ‘hate speech’ and blame things like the Alex Jones show, or others that speak up, rather than on their own fearful boobery.

Bloggers who write columns today are similar to those patriots who wrote pamphlets on freedom some 250 years ago. They are the same individuals whose pamphlets inspired a nation to rise up against unjust laws from a tyrant king. They are not hate mongers, they are ordinary citizens expressing their right to question the acts of its leaders.

This is fundamental to what America is — the right of freedom of speech.

Since the clowns on the left have no real understanding of what truly makes America great, it is no wonder they attempt to paint e-writers as something less than savory.

The left also makes no mention of the vast amount of left wing blogs and radio programs. Why? Because they make little impact in the ratings or American political thought.

The left doesn’t want to let you in on a little secret- that the majority of Americans are fairly conservative in their thought, and are, as Nixon put it, a “silent majority.” How many ordinary people are beginning to become involved in the political process these days?

How many ordinary citizens and business leaders have suddenly woken up to what is going on, and have started to run for office, or become active in politics at their local level?

A lot more — and that’s thanks to the very outlets that the left is trying to limit, and thus limit who and what runs this country.

They equate a blogger who dares to question the supremacy of the White House as someone who yells “fire” in a crowded theatre. Well, it’s not wrong to yell “fire” in a crowded theatre.

Not if the building is on fire.

Listen to “Liberty Never Sleeps 08/02/18 Show” on Spreaker.

The mainstream media and social media giants

People's Pundit Daily
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