Politics And The Markets 08/16/23

The economic news out of China this summer has been grim. But the headline figures, as bad as they are, may be hinting at a more fundamental issue: Beijing has failed to convince households that their financial future is secure in the post-Covid era.

There is plenty of ugly news to choose from: exports are falling, foreign investment is drying up and the overall job market is weakening again.

But perhaps the most compelling explanation is this: Households have suffered an enormous, and possibly permanent, loss of confidence in both their future income prospects and the safety and value of their main financial asset, housing. And in both cases, Beijing’s recent policies deserve much of the blame, which may be one reason economic data has suddenly become so sensitive.

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Did your doctor sell out to private equity, making the practice less patient friendly?

Here is one of many reasons why that is happening

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Michael Flynn, the MAGA martyr who spent just over three weeks as Donald Trump’s national security adviser in 2017, suggested in a speech this month that Jews were to blame for their extermination in the Holocaust. In a speech at a so-called “unity rally” at a Michigan church on Aug. 4, Flynn recalled a trip he’d taken to Auschwitz. His tour group was taken to a train station, he said, and what “bothered” him while walking through the site was the idea that a mother would willingly hand over her child to be stuffed “like a sardine into a train.” Flynn added that he approached the tour guide with this thought: “I’m asking him, ‘So tell me, what were the rules for the guards?’ Because there wasn’t many guards. But there were thousands, thousands of people ... that just said, ‘Okay, here’s my child,’ and get on the train.” Responding to Flynn on Twitter, the Auschwitz Memorial said that his remarks “[oversimplified] the dire circumstances [Jews] faced during the Holocaust,” adding that his words were “wrong” and risked “perpetuating harmful narratives.” Flynn, who is currently in his third year of touring a Christian nationalist roadshow around the country, has previously drawn criticism for his assertion that there should be “one religion” in the United States.

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President Biden has been traveling the country, touting the benefits of Bidenomics, claiming his tax and spending policies have been an economic success.

The President says his approach is a better alternative to Reaganomics, which he constantly refers to as trickle down economics, or tax cuts for the rich.

He argues that the Reagan approach has never worked, and that his tax and spend policies will produce stronger economic growth.

But history shows that free market policies of low tax rates and limited spending have consistently led to stronger economic growth.

In the early 1980s, with the economy facing double digit inflation and a recession, President Reagan’s economic recovery program was enacted by Congress with bipartisan support. The Reagan tax cuts were not tax cuts for the rich.

His tax cuts reduced tax rates across the board in every tax bracket. Every taxpayer received tax relief, and everyone benefited from the subsequent higher economic growth.

According to the Joint Tax Committee, two-thirds of the tax cuts went to middle-income taxpayers. Only six percent went to the top income level.

More importantly, the Reagan tax cuts worked, producing the longest peacetime economic expansion since World War II. The tax cuts ignited an economic boom, with real GDP increasing 7.9% in 1983 and more than 8% in the first half of 1984. All told, economic growth averaged nearly 5% a year through 1988.

By comparison, real GDP has averaged only 2% a year since 2007, and an anemic 1.3% over the last year and a half. CBO is projecting the economy to grow at only 1.7% a year for the next decade.

Under Reagan, inflation dropped from double digit levels to 4%. The unemployment rate was cut in half, and 20 million new jobs were created. Business investment soared, and real income grew at every level. By the end of Reagan’s second term, the U.S. economy was one-third larger than when he took office.Biden used to appreciate the benefits of pro-growth economic policies.

Then-Senator Biden voted for the Reagan tax cuts, saying in a Senate speech that he has “long advocated a reduction in the tax burden for individuals and businesses,” and that the tax cuts would “give a boost to the sluggish economy and encourage businesses to invest to achieve greater productivity.”

That is exactly what happened. Thanks to the corporate tax cuts, manufacturing productivity grew at an average annual rate of more than 4%, nearly 50% faster than during the period 1948-1973, leading to higher wages, better jobs, and greater growth.

Biden was right then, and he is wrong now.

We need to move away from Bidenomics and put in place the Reagan pro-growth policies of low tax rates and spending restraint to unleash stronger economic growth.

Former White House Chief of Staff Mark Meadows filed a motion on Tuesday to remove the Fulton County, Georgia, indictment against him to federal court.

Meadows was charged with two counts in a 41-count indictment that named himself, former President Donald Trump, and 17 others. Meadows is being charged under Georgia’s RICO statute and faces charges for soliciting an official to violate their oath of office.

Fulton County District Attorney Fani Willis cites Meadow’s involvement in setting up calls between Trump and various state legislators as evidence of his violation of state law, conduct that primarily falls under the duties of chief of staff, as Meadows’ attorneys noted.

“Nothing Mr. Meadows is alleged in the indictment to have done is criminal per se,” Meadows’ attorneys George Terwilliger and Joseph Englert argued.

As the motion states:

"Mr. Meadows has the right to remove this matter. The conduct giving rise to the charges in the indictment all occurred during his tenure and as part of his service as Chief of Staff. In these circumstances, federal law provides for prompt removal of a “criminal prosecution … commenced in a State court … against or directed to” a federal official, “in an official or individual capacity, for or relating to any act under color of [his] office.”

Nothing Mr. Meadows is alleged in the indictment to have done is criminal per se: arranging Oval Office meetings, contacting state officials on the President’s behalf, visiting a state government building, and setting up a phone call for the President. One would expect a Chief of Staff to the President of the United States to do these sorts of things. And they have far less to do with the interests of state law than, for example, murder charges that have been successfully removed."

Meadows’ attorneys relied on the Constitution’s Supremacy Clause, which establishes that the federal Constitution and federal law take precedence over state laws and constitutions.

“This is precisely the kind of state interference in a federal official’s duties that the Supremacy Clause of the U.S. Constitution prohibits, and that the removal statute shields against,” the motion states.

Meadows “intends to file a motion to dismiss the indictment” under federal court rules, according to his attorney.

“Defendant Meadows has defenses to the charges in this Georgia indictment that arise under federal law, including a federal immunity defense under the Supremacy Clause of the Federal Constitution,” the filing states.

Mike Davis of the Article III Project called on Trump to follow Meadows’ footsteps and remove the case to federal court and then move to dismiss the case citing “presidential immunity.”

Following Meadows’ argument, Trump could also challenge the Georgia indictment on the grounds that it interferes with his exercise of presidential powers under the Electoral Count Act of 1887, whereby states are prohibited from interfering with a president asking about election fraud.

ABC News reported that Trump is “also expected to mount a similar effort,” citing sources familiar with the matter.

The case is Georgia v. Meadows, No. 1:23-cv-03621-SCJ in the United States District Court for the Northern District of Georgia.

OK, so HERE'S your Trivial Pursuit kill shot. This is amazing stuff, and no, you don't know it (guaranteed). It turns out that The Duke, yep, the one and only Marion Morrison (John Wayne) had a cameo in the first Star Wars movie.

His voice was used, via synthesizer, for some critter named Garindan.

OK, so if you already knew this, then wow, YOU are the trivia king. I worship your shadow.

Not so fast with the CPI celebrations: Rents are surging again and back to record highs.

In other words, not only are surging commodities about to blow away hopes for moderation in headline CPI, but economists are once again dead wrong, and instead of looking at the moderation in YoY rents – which they correctly see as indicative of a slowdown in the CPI basket-heavy OER index – what they should be looking at is the real-time actual rental index, which has been rising for 6 months now and is about to take out all time highs at a time when the Fed is supposedly pausing its rate hikes and if anything, is already planning its next easing cycle.

The former head of counterintelligence for the F.B.I. in New York pleaded guilty in federal court in Manhattan on Tuesday to a single reduced charge of conspiring to violate U.S. sanctions and laundering payments from a prominent Russian oligarch.

McGonigal could get up to five years in prison under this plea deal, and he has another indictment still pending for taking money while still in the FBI from Eastern European sources.

So a guy pushing the Trump Russian collusion story was colluding with the Russians. Why am I not surprised?

It was reported in April that Oregon’s Department of Human Services announced it would prevent some Christian families from adopting children due to their “extreme views.” Potential adopters now receive an ideological litmus test to ensure that parents adhere to the woke agenda and will agree to let their child transition to any gender at whim.

Massachusetts has joined Oregon in preventing Christians and other religious couples from providing homes to children. One couple from Massachusetts has taken the Commonwealth to court (Burke v Walsh) after they were denied the right to foster at-risk children. Mike and Kitty Burke were deemed unfit caregivers solely because they believe in the Catholic faith. “After months of interviews and training, and after years of heartbreak, we were on the verge of finally becoming parents,” said Mike and Kitty Burke. “We were absolutely devastated to learn that Massachusetts would rather children sleep in the hallways of hospitals than let us welcome children in need into our home.”

The Department of Children and Families (DCF) admits that they have 1,500 children displaced children awaiting forever homes. The state has no room to house these poor children temporarily and has resorted to leaving these vulnerable children in state hospitals for weeks at a time. The Burke family wanted to welcome at least one child into their home. “Their faith is not supportive,” the social worker deemed, citing their views on gender dysphoria and sexual orientation. Perhaps the state of Massachusetts will allow the Burke family to foster an illegal military-aged adult male since that is of top priority. The entire woke agenda is hurting thousands of children.

Sometimes revealing a communist is a little like taking off a Band-Aid. You’ve got to pick at the edges a little bit until you can get enough gripped to rip it off.In this brutally perfect appearance on his new network gig, CNN, Jonah Goldberg, the pontificating pustule of totalitarian elitism, declares the “small donor” influence in the Republican Party, ie. MAGA and working class grassroots support, is the problem for those (private club) corporate officers who have high-minded control.

..."I just also think that we are dealing with a time, where for a lot of people, there’s a lot of people cheering and self-congratulation about the rise of small donors a decade ago. And now small donors are actually one of the biggest problems for, well, democracy in the GOP. Because, um, large donors have a strategic view about moderation, who can win and who can’t. Small donors really are just venting their spleen with their credit card, and they lock candidates into positions that can hurt them in the general election.”…

Goldberg might as well have called us ‘Deplorables’. Goldberg’s statement sounds like that of a spoiled child that wants to control the game because the ball is his. We don’t need his ball, we’ve learned a new game and we are the home team.

There is a particular brand of GOPe hypocrisy around a worldview that spouts unbridled capitalism as the solution to all the economic woes, and yet they rail against the unwashed masses having a voice in the democratic process.

The ushers in conservative media were/are really closeted communists. Identically aligned and elite minded sanctimonious frauds, loading sheep onto intellectual cattle cars. The professional Republicans don’t believe in conserving anything other than the power structure that produces their affluence and influence.

Peel the skin off a professional Republican, and you will find a communist demanding you sit quietly, then insert vote, pull lever, take your pellet, shut up and leave the building. That’s who they are.

The best, and greatest thing about Donald J. Trump, is how he forced all the professional Republican snipers to reveal their positions.

Who’s on first?