Saturday, November 12, 2016

Through a Window Darkly

One of the things most of us said about the coming election was that we were dead sure that Hilldebeest would have been a disaster, but how Trump would govern was a virtually complete unknown.  As we're getting a glimpse of the coming policies, in the same way you might start to see an outline of an approaching car through dense fog, more details are starting to emerge.

On the positive side, hat tip to No Laywers - Only Guns and Money, we're getting a better picture of his first priorities on the second amendment and it's mostly good.  While he makes no mention of removing silencers from the NFA or eliminating the BATFE, two of my favorites, he does say (editing for brevity):
GUN AND MAGAZINE BANS. Gun and magazine bans are a total failure. That’s been proven every time it’s been tried. ...The government has no business dictating what types of firearms good, honest people are allowed to own.

BACKGROUND CHECKS. There has been a national background check system in place since 1998. ... What we need to do is fix the system we have and make it work as intended. What we don’t need to do is expand a broken system.

NATIONAL RIGHT TO CARRY. The right of self-defense doesn’t stop at the end of your driveway. That’s why I have a concealed carry permit and why tens of millions of Americans do too. That permit should be valid in all 50 states.

MILITARY BASES AND RECRUITING CENTERS. Banning our military from carrying firearms on bases and at recruiting centers is ridiculous.
The whole position paper is here (pdf warning).  I can find fault with parts of this, especially the priorities chosen, but is good overall. 

Economically, unfortunately, the picture is more bleak.  On the positive side,  I like the idea of reducing the corporate tax rate from 35% to 15% for the same reason that linked Irish news site is writing about this plan: the idea is to prompt American companies who moved to Ireland and other places for lower taxes to come back to America.  For those of you new to this blog, one of my first principles in thinking of these things is to ask "and then what happens?".  In this case, you can be sure other countries will drop corporate taxes to reduce our advantage and sway those companies. That will even help businesses in places where they don't believe in it.

Zerohedge posts this graphic comparing Trump's announced tax plans in the right column to current law, Obama's budget, and the current Republican proposal.
You can see portions of Trump's proposals are not well defined or not addressed at all, which I assume means they're negotiable.  In general, of course, lower tax rates don't lead to lower tax revenues because the economic activity shifts to individuals.  Lower rates can lead to higher tax revenues.  Money spent by individuals has a multiplier effect: spending a dollar at the local pizza shop increases their business, which can lead to them expanding the shop - or at the very least, the owner taking home some more money which they spend.  It has been shown in a handful of recent studies that the growth multiplier of government spending, always assumed by Keynesians to be positive, is actually less than one (called negative): it causes economic contraction, not growth.  It's better to let people spend their own money than take it as taxes. 

On the negative side, there's talk of $1 Trillion in infrastructure spending and fiscal stimulus.The plan is presented as "privately financed but encouraged by tax credits".  More specifically, it calls for $1 trillion of spending over 10 years to be funded largely by private sources which would be repaid with tax credits and usage taxes (i.e. toll roads).  Which brings to my mind the usual question of where we get that money.  With the total national debt at $19.8 Trillion, and the demand for bonds driving the yields down into negative territories, one has to wonder how big the appetite for US bonds is (demand for bonds raises prices and lowers interest paid - their yield). 

To put a short summary on this, while some of Trump's proposals are fine, I see nothing to change the opinion I know I've talked about many times: that our economy is due for a real bad turn.  Severe recession again, or outright collapse, I can't say.  I don't think the chance of recession is 100%, like Bill Bonner's firm is saying, but that's just because I never assign either 0% or 100%.  


  1. If they would stop landscaping the highways and spend that money on roads and bridges we would be a lot better off. Same with funding public transit and green ways. All nice to have but...

  2. Most/all politicians are too timid when it comes to fixing our economy and trade balance. What we should do is make corporate tax 0% for all businesses within the country. Then put a tax of 25% of retail value on all goods and services from outside the U.S. This would create the biggest sustained boom our economy has ever seen.

    If You want to reduce infrastructure costs dramatically repeal the Davis-Bacon act.

    1. I love it. This would freak out the left to all new levels of crazy(ier) because so many think that corporations actually pay that 35% tax and not their customers.

      And repealing Davis-Bacon would freak out the unions. Speaking of that, I learned a fun fact about D-B from NFL retiree Burgess Owens in interviews about his book. He says the law was passed because the black construction workers were out-working the white unionized workers and getting all the contracts. They couldn't compete so they bought regulation.

  3. Trump will certainly bring better ideas to bear than most anyone else especially from the left. The problem of course being implementing those ideas. Even if Trump has the full complete and total cooperation of everyone in DC he won't be able to solve many of our problems in one term....for some even a second term won't be enough.
    It took generations to get where we are....we aren't climbing out of
    this hole in one term. But the GOP doesn't really like Trump any better than the dems. And to accomplish anything of merit he must
    sign laws....laws that must pass congress. With only a 2 vote majority in the Senate the GOP will find that tough at best. The dems
    can always filibuster. And that assumes there aren't some quislings in
    the GOP ranks who will vote with the dems. So don't count on much in
    the way of action from congress. It will likely be a repeat of the past six years where the GOP blocked any dem legislation they didn't like and Obama vetoed any GOP bills that made it to his desk HE did not
    like. Trump will be forced to either obey the laws....and be crucified by the media for being an impotent useless POTUS....or he can
    take a page from Obamas play book and do what he wants OUTSIDE of the legal methods because like Obama he has 'a pen and a phone'. If he does this, once again, he will be crucified by the media. No matter what he does he will be ridiculed, harassed, lied about and obstructed
    by the propaganda arm of the democratic party. He will be sabotaged,
    backstabbed and lied about by Hollywood and academia. NOTHING he does will be acceptable and ANYTHING that goes wrong will be HIS MISTAKE.

    And four years from now he will probably lose to a one legged lesbian Mexican trotted out for the specific goal of garnering the votes of stupid people who bought the lies.

    No....Trump has some good ideas. Most will be stillborn. Unless he gets a true majority in congress during the midterms he will be for
    the most part relegated to either impotence or illegality. Either way
    he will be hoisted up for ridicule by the elite every day of his term.

    We have not elected our salvation. We have managed to eke out a 4 year delay in the coordinated plan to destroy America.

    The ONE THING that Trump CAN do without congress is to 'drain the swamp'. He does not need congress for this. He can replace Comey and
    his senior staff with honest people. He can appoint an honest AG at the Justice Dept who will clean house there and then do their job. And then he can go after EVERYONE involved with the massive conga line
    of corrupt actions brought to life by WikiLeaks etc. This could and if the evidence supports it SHOULD include Obama and his staff.
    If Obama pardons everyone Trump must dissect Obamas past.....if it can
    be shown he was not eligible for office, and that is still a very real possibility, then everything Obama did and signed is null and void including ALL pardons.

    No....Trump will be hounded and hampered but he CAN if he chooses make life hell for the criminals currently infesting the halls of power.

  4. I have no doubt Democrats, and to a similar degree, Establishment Republicans, will become an impediment to achieving what we hired Donald Trump to do.

    That said, Trump has demonstrated a knack for going around the media si I'd expect that to continue, much to the dismay of an already discredited media.

    No, it all cannot be fixed in one term; the best we can hope for is, first, a change in tone from Washington, and second, noticeable improvements where it's obviously needed. Four years is an adequate period to continue descrediting the forces of status quo and demonstrate it is possible to correct decades of errors.

    An ancient proverb proclaims that every journey begins with a single step; we are in dire need ot some very large steps, but as long as each step is in the right direction that's a positive.

    I still intend to keep adding to my stocks of freeze dried food and ammunition, however, because Democrats, Establishment Republicans and their enablers aren't going away.

  5. $1 Trillion over 10 years is peanuts when you consider this ...

    I have been looking recently into "Where did all that money go?" and now I have the beginnings of an answer! That will pay for a lot of stuff and that is off the top.

    1. Thanks for that link. I knew about some of it, like there not being a budget since W, but not all of it.

      Folks - go read. You can copy that into a browser, or click here

  6. I have decided that I will drive myself crazy if I try to predict what Trump or any other politician will do from what they are saying so I follow the old maxim from playing defense in sports: watch their feet. So let's see what actually happens. I do know that with Trump we have a chance but with Hillary no chance so things are better. I think the Republicans could have done better than Trump but that is shoulda-coulda-woulda so we have to deal with things as they are.