Where’s A Budget-Cutter To Turn?

Congress has passed, and President Trump has signed, a $1.3 trillion interim federal spending bill.

That’s $1.3 trillion, with a “t.”  And that’s interim, in that the colossal amount of spending will only fund our out-of-control federal government until September 30, when another spending bill will be needed.

8125974243_f6ce8726f2_bPresident Trump, who briefly raised the threat of a veto before putting his John Hancock on the bill, says he’ll never sign another bill like this one.  I’m calling BS on that one.  The reality is that, for people like me who think our country has an enormous spending problem that eventually will be our downfall, there’s nowhere to turn.  The Democrats never met a domestic spending program that they didn’t want to increase.  The Republicans, who posture about deficit responsibility, have shown that they are too craven, and too interested in avoiding ruffling any feathers that might interfere with their reelection prospects, to tackle the tough job of actually reducing, and in some instances eliminating, federal programs that really aren’t necessary.  And President Trump is a deal-maker who will gladly rationalize just about anything, just as he did with this latest monstrosity by saying that the increase in military spending makes all of the rest of the irresponsibility palatable.

There are no longer any institutional forces that will restrain federal spending or cause our political class to act like statesmen and take the long-term, good-for-the-country view.  There’s no appetite whatsoever for careful judgment, for systematic review of whether programs are actually working, and for making the thoughtful choices that are a crucial part of living within your means.  Once again, we’re seeing concrete evidence that the current class of political leaders are the worst political leaders in history.

We’re on the cash-paved road to failure, and spending ourselves into oblivion, and nobody seems to really care about doing anything about it.

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Willful Ignorance

Kish shared a fascinating article with me, a New York Times piece about a man who was upset by the election of Donald Trump and, ever since, has decided to retreat from getting information about what’s going on in the world.

stream_imgA former corporate executive, Erik Hagerman lives alone on a pig farm in Glouster, Ohio, in the southeastern part of the state.  He’s consciously avoided getting any information about what has happened in America since November 8, 2016, and has taken steps with his friends and his life to enforce the ban.  No social media.  Constantly reminding his mother, family, and friends, and the baristas at the local coffee shop, to honor what he calls The Blockade.  And, as a result, he is blissfully unaware of everything that is happened for the past year and a half.

I say “blissfully,” because Mr. Hagerman reports that he’s “emotionally healthier than I’ve ever felt.”

When I first read the article, I thought that Mr. Hagerman’s solution to the news of President Trump’s election sounded pretty juvenile and immature.  Really?  An adult who can’t cope with adverse news and decides to disengage from the world as a result, like the kid who gets mad at his friends and takes his football and goes home?  But after thinking about it, I wonder if Mr. Hagerman’s example isn’t worth emulating, even if only a little bit.  Why work yourself into a lather on a daily basis about faraway political races, investigations, congressional hearings, and other that are beyond your control?  Why expose yourself to social media memes that are just going to get under your skin?  It makes you think about what’s really important, doesn’t it?

Most of us don’t have the ability to move to a pig farm in rural Ohio, live a solitary life, and shield ourselves from reality.  Our jobs require us to have a least a rudimentary awareness of what is going on in the world, as we deal with customers and clients and colleagues.  But maybe some disengagement from the big, bad world, and a renewed focus on our families and things like reading the classics, taking long walks with our loved ones, or starting a new do-it-yourself project at home would be good for us all.

A total blockade won’t work, but total immersion isn’t a wise thing, either.  Trying to strike a balance makes sense.

Bracing For The Weirdest Summit Ever

According to news reports and a tweet from President Trump, there will be a summit meeting in the next two months between President Trump and North Korean dictator Kim Jong-Un.  The agreement to set up a meeting was brokered by the South Korean government, and the place and time of the summit is currently being determined.  In the meantime, North Korea has agreed that it will not engage in any more missile testing until after the summit occurs.

Whenever and wherever it happens — if it happens at all — the meeting promises to be the weirdest, most closely watched, most unpredictable summit in history.

donald-trump-kim-jong-un-ap-mt-171101_16x9_992Viewed solely from the standpoint of normal diplomacy, this meeting will be highly unusual.  North Korea and the United States have no diplomatic relations of any kind, and no American President has ever met a North Korean leader.  In fact, the United States and North Korea technically remain in a state of war, because the Korean War ended in an armistice, not a peace treaty.   Even President Nixon’s famous trip to China, which reopened relations between America and China, was built upon a prior period of thawing relations and more diplomatic prep work than would occur before this summit.

Add to that the fact that President Trump and Kim Jong-Un have been trading venomous barbs about each other and engaging in lots of saber-rattling talk until now, and are two of the most unpredictable leaders in the world besides, and you have to wonder what the talks between the two of them will be like.  The diplomats and underlings who will be present, from both sides, will no doubt be desperately hoping that Kim Jong-Un and President Trump follow whatever scripts their respective sides have prepared — all the while knowing that history teaches that they probably won’t.  And the media, which carefully analyzed a handshake between President Trump and Russian leader Vladimir Putin when they first met, will have a field day examining and breathlessly reporting on every wink, nod, and offhand comment.

North Korea has long been a problem that has been ignored by world leaders, hoping it would just go away — but the provocative, destabilizing conduct of North Korea has gotten more and more dangerous as it has worked to develop nuclear weapons and tested long-range missiles.  Something needs to be done to get North Korea off the path of confrontation and into more normalized relations with the United States and the rest of the world.  Will The Weirdest Summit Ever be able to achieve that?  The world will be watching the weirdness, and holding its breath.

On The Roller-Coaster Ride

If you’ve got some of your retirement savings invested in the stock market, as many of us do, the last few days have been unnerving.  The market had an historic run up, and then it went down again.  Yesterday, where the Dow Jones Industrial Average at one point had dropped 1600 points, was an especially wild ride.

704254-001When the market behaves like this, what’s a normal investor, who’s not an insider or a financial kingpin, supposed to do?  You can get dizzy just reading all of the different views of what is “really” going on.  Some people say it’s just a predictable correction after years of historic gains.  Some say the Trump tax cuts have overheated the economy and the market is reacting to that.  Some say we’re long overdue for a bear market.  And some say the Federal Reserve Board hates President Trump and his focus on the stock market as a proxy for his presidency and just wants to bring him down low.

(The last theory, in which the Fed would be intentionally manipulating the market for overt political purposes, is especially troubling — and even in these conspiratorial times, seems pretty unbelievable.  To buy that theory, you’ve got to conclude that the Fed’s dislike for President Trump is so powerful that they are perfectly willing to take actions that torpedo the retirement portfolios of millions of individual investors just to give the President a black eye.  Could bureaucrats really be so disdainful of average Americans?  Call me naive, but I find that incredibly hard to believe.)

So what’s really happening here?  Beats me!  My guess is that the run-up has been so significant that there are lots of people out there who thought it was time to take their profits, and the downward movement caused by those sales then triggered some market-decline benchmarks that automatically produced further sales and caused the sharp fall — but that’s just a guess.  Maybe somewhere on Wall Street somebody knows the real answer for sure, but I doubt it.  The stock market is so complex, so huge, and so prone to human reaction that it’s difficult to explain these downward spikes.

So, to put the question again, what’s a little-guy investor to do?  If you think saving money for retirement is prudent — if you don’t, you probably wouldn’t read this post in the first place — and you need to find a place to put your money until the retirement day comes, there really aren’t many alternatives to the stock market that can produce a meaningful return.  Most of us aren’t offered opportunities to invest in real estate deals or development projects, and we probably wouldn’t be comfortable having a big chunk of our money invested in such illiquid things, anyway.  Bond yields are low, and banks pay next to nothing on CDs.  So where else are you going to put your money?  This reality suggests that basic, brute economic forces are going to continue to make the stock market a preferred investment option for people and businesses, not just in the U.S. but also abroad.

But you’ve got to recognize that the stock market is a long-term investment, and it’s going to be a roller coaster ride.  When you’re on the coaster, it’s pretty hard to get off on the highest hill, and you don’t want to exit the car and move onto the tracks at the bottom, either.  You just hold on, scream when the cars start that big downward move, and feel your pulse racing until the end.  Or, you can simply close your eyes, recognize you’re on the ride and there’s not much you can do about it, and focus on other things until your circumstances make you a short-term investor and there are true decisions to be made.

Who knows what this current jittery period will bring?  It’s time to hang on tight.

Whither The Wall

President Trump’s promised wall along the border between the United States and Mexico was part of the wrangling between Republicans and Democrats that led to a brief government shutdown over the weekend.

onrfrqd6mxsghuj5Surprisingly, some Democrats who had long opposed the wall signaled that they were willing to drop their opposition if Republicans would make concessions to give “Dreamers” — immigrants who were brought illegally to the United States when they were children — additional legal protections.  And, in negotiations with the President to try to avoid the shutdown, Senate Democratic Leader Charles Schumer evidently offered to agree to more than the $1.6 billion in funding for the wall that Trump has requested.  More recently, Democratic Senators are saying that Schumer has withdrawn that offer and it is “off the table” because it was intended solely as a last-ditch effort to avoid the shutdown.

And, as the politicians wrangle, prototypes of different models of the wall apparently are being tested to determine whether they really would deter illegal border crossings.  According to a report by the Associated Press, eight models of the wall have been constructed in San Diego, and U.S. military special forces and U.S. Customs and Border units spent weeks trying to breach and scale the models.  The models are made of different materials, including steel and concrete composites, and are as much as 30 feet in height.  According to the reports, the designs did have some success in repelling the military forces, which include members trained in trying to climb high walls.

Political positions are fluid, but it would seem to be difficult to take the position that a wall is wrong on principle after you’ve agreed to support it, and even throw more than a billion dollars at its construction, in exchange for other concessions.  And if the reports on the testing are accurate, that would remove one argument that often is made against Trump’s wall proposal — namely, that a wall would be ineffective because illegal immigrants would be able to climb or otherwise breach it.  Of course, even if the ethical and functional objections to the wall are set aside, there would remain other grounds for opposition, including enormous cost, the impracticality of a wall in rugged mountainous regions, and the aesthetics of a wall in certain scenic areas — but the signs indicate that Donald Trump’s wall may be moving closer to reality.

Why A “Windfall”?

If you’ve been following the aftermath of the tax reduction legislation passed by Congress and signed into law by President Trump, you’ve seen stories about how some corporations have reacted to the new law by giving their employees bonuses or cutting their charges to consumers, and other, more critical stories noting that many of the companies are giving their employees one-off bonuses, rather than more permanent raises.

windfall-money-manBut while different articles about the tax cut legislation may make different points about how the tax cut legislation is affecting companies, workers, and the country at large, the coverage does seem to have one curious common theme and descriptive element:  the tax relief provided by the new law is typically said to have produced a “windfall” for companies and individuals alike.

It’s a very interesting choice of words — and one that conveys a deeper message, too.  The Merriam-Webster Dictionary defines “windfall” as “something (such as a tree or fruit) blown down by the wind” or as “an unexpected, unearned, or sudden gain or advantage.” The key underlying concept is that the “windfall” is a lucky gift and an unearned surprise — like an inheritance from your mother’s rich second cousin whom you’d never met.

“Windfall” is a telltale choice of words in this context because tax payments necessarily have been earned by whoever is making them; companies and individuals wouldn’t be paying taxes if they hadn’t sold the products or done the work or made the investments that generated the revenue in the first place.  By calling the proceeds of a tax cut in which individuals and companies pay less a “windfall” for them, you’re really suggesting that the taxpayers aren’t entitled to their own money, the government is — and taxpayers should consider themselves lucky that, for a time at least, they get to keep more of it.

Income earned as the fruit of labor or investment isn’t like fruit blown down from a stranger’s apple tree.  You can argue about whether the tax cut was good economic or social policy, but when taxpayers get to hold on to more of the money they’ve already earned it can’t reasonably be characterized a “windfall” for them.  The fact that so many news articles nevertheless present the issue in that way says a lot about how the news media, at least, views the respective entitlements of taxpayers, and government, to the money taxpayers earn.

Where Are All Of The Great New Political Protest Songs?

Lately I’ve been listening to my iPod playlist of protest songs.  It features a lot of music from Bob Dylan and Rage Against The Machine, of course, as well as some great songs like CSNY’s Ohio, Stevie Wonder’s Living For The City, Buffalo Springfield’s For What It’s Worth, Mercy, Mercy Me from Marvin Gaye, Bruce Springsteen’s Born In The U.S.A., Zombie from The Cranberries, Get Up, Stand Up from Bob Marley and the Wailers, John Lennon’s Working Class Hero, Neil Young’s Rockin’ In The Free WorldMy City Was Gone by The Pretenders, Capital G by Nine Inch Nails, The Temptations’ Masterpiece, and a whole lot more.  

rs-4997-rectangleIn all, there are more than 230 classic songs on the playlist, spanning multiple decades, all featuring great music and lyrics that pack a punch and convey a clear, pointed political message.  There are songs about important social and political topics of the day, like racism, the Vietnam War, oppression, the right to protest, poverty, ecology and the environment, urban renewal, the indoctrination of youth, and the mallification of America.  And listening to the songs got me to wondering:  where are the new, great political protest songs about our current era?

I guess just about everybody will agree on one thing about President Donald Trump:  a lot of people hate his guts and despise his policies.  He’s depicted as a racist, as a Nazi, as an imbecile, as a warmonger, as an oppressor, and as just about any other bad thing you can imagine.  It seems like President Trump offers very fertile territory for some great modern protest songs.  And don’t tell me that more time needs to pass — CSNY’s Ohio, about the National Guard’s shooting of students at Kent State University, was written, recorded, and released to the public in about two weeks, and the immediacy of the anguish about the unwarranted killings, which comes through in the song with raw, crackling power, is what makes it one of the greatest protest songs ever recorded.

So, are there any great new political protest songs about President Trump and his Twitter comments and his policies, and if not, why not?  Are they all rap or hip-hop songs, and just not reaching the ears of 60-year-olds?