US Economics, Politics, Scratch

By pjain      Published July 7, 2021, 11:29 p.m. in blog Geo-Politics   

TOC Sanctions and Penalties for Bad Actors

Biden visa penalties on Oligarch and Terrorists

  • [Biden targets children, spouses in visa crackdown on world’s villains - POLITICO](https://www.politico.com/news/2021/07/07/oligarch-visa-bans-498336}

TOC Covid Handling in 2021 and Beyond

Getting to 100% Vaccination Rates

  1. The White House, which acknowledged it will fall shy of its goal of vaccinating 70 percent of adults by July 4, 2021.

  2. State initiatives like million-dollar lotteries and giveaways have failed to meaningfully blunt the steep drop-off in vaccinations.

Delta Variant reaches 50% of Hospitalization

The rapid spread of the highly transmissible Delta variant, particularly in areas of the country where vaccination rates are lagging

Pastors don't want to preach for Vaccination

NIH Director Collins a devout Christian has appeared with evangelical leader Franklin Graham to tout the safety and efficacy of Covid vaccines, and Biden has talked up vaccination during his Easter message and the National Day of Prayer.

Why pastors surveyed are wary of alienating their congregants and are declining requests to be more outspoken.

  1. God will Provide. In a head in sand

  2. Money. They don't want to lose attendees (and donations) if Covid fears are upheld.

  3. Many pastors said they have already lost congregants to fights over coronavirus restrictions and fear risking further desertions by promoting vaccinations.

  4. Religious are Conservative - anti-Vaccine. “If I put forth effort to push it, I’d be wasting my breath” Polls have consistently shown that white evangelicals are among the groups most hardened against vaccination with 22% of them would NEVER get the vaccine, and 11% postponing with a wait-and-see attitude.

  5. Vaccination has become a huge political divide - triggers hate and vehemence in often religious, "hard warking" SME owners who are usually Republicans vs loose talking fast walking "Democrats. The pastors don't want to get in the middle. Even leaders who felt they could at least straddle the political differences in their congregation now feel that it is almost impossible to bridge the partisanship.

  6. [‘Wasting my breath’: Southern faith leaders wary of promoting vaccines - POLITICO](https://www.politico.com/news/2021/07/03/southern-pastors-vaccines-497898}

Reopening - UE Benefits, Schools and Daycare Crucial

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TOC US Military Policy and Powers

War Powers pulling back to Congress - AUMFs

1957 AUMF signed into law by President Dwight D. Eisenhower to prevent the spread of Soviet communism in the Middle East, but it was never formally invoked.

1991 AUMF was approved in the run-up to the first Gulf War. For the better part of the last 30 years authorizations have undergirded U.S. military operations in the Middle East, giving presidents wide and mostly unchallenged legal authority to put boots on the ground, conduct airstrikes and more.

2001 post 9/11. The open-ended 2001 AUMF authorization was adopted in the days following the Sept. 11 attacks and effectively gave successive presidents a blank check to go after the terrorist groups responsible

2002 AUMF separate?

  • Presidents of both parties have seized expanded war powers in the post-9/11 era.

  • Politicians who pushed to rein in presidential war powers were relegated to the fringes as a fantasy of the extreme progressive left and portrayed as anti-patriotic.

Repeal in 2021 as Not needed for Mideast as Exit Afghanistan Sep 2021

Exiting Afghanistan, as the nation grows weary of so-called forever wars, the concept has near-unanimous support in the Democratic Party and buy-in from a significant cohort of Republicans — giving Congress its best chance in a generation to re-assert its authority over matters of war and peace.

Biden has come out in support of repealing past authorizations and re-tailoring others amid commitments from both Senate and House leadership. Biden early 2021 came out in favor of replacing the very open-ended 2001 AUMF as it does not serve any purpose since the Iraq War has been over for a decade now.

Jun 2021 Senate and House are moving to repeal outdated authorizations for the use of military force that are often ripe for abuse by the executive branch. The House already repealed AUMFs passed in 1957, 1991 and 2002 — with the latter representing a particularly crucial goal for activists, since it authorized the initial post-9/11 invasion of Iraq. The Senate is on track to scrap the 1991 and 2002 authorizations, a process that is slated to begin when the chamber returns to session next week.

WaPo reported Biden administration intent to retaliate against the Iran-backed militias in Syria and Iraq even if no Americans are killed or injured — a lower threshold than the Trump administration used.

Iraq and Syria

US is still very much present in Iraq and Syria, so Biden needs to handle the increasing spate of attacks from Iran-backed militia groups in other parts of the region.

US is still in bases in UAE, Qatar, and tip of Persian Gulf in Djibouti.

  • SRC [Why Congress is finally starting to claw back its war powers from the president - POLITICO](https://www.politico.com/news/2021/07/07/congress-aumf-biden-498399}

Anti-Iran - Israeli Supporters and Hawks want to retain

Most Republicans have already staked out their opposition to scrapping the 2002 AUMF, contending that it would unnecessarily hamstring the commander-in-chief and would send a bad signal to terror groups looking to gain a foothold in the region.

GOP hawks warn against moves that would prevent the U.S. from attacking Iran.

Zionists and Israeli Lobby is very clearly in swing saying it would also embolden Iran.

Sen. Ted Cruz (R-Texas) said in an interview that while Congress has been “far too lax” in ceding war authorities to presidents over the years, he plans to introduce an amendment that would preserve Biden’s authority to take military action against Iran — both to protect Americans in the region and to prevent Tehran from acquiring a nuclear weapon.

Air Strikes and Article II Powers

The Constitution grants the president broad authority to act in self-defense, so Congress can do little if anything to stop potential abuses of Article II.

Even as Biden backs congressional efforts to scale back his war powers under AUMF, he has increasingly relied on his Article II authority to conduct airstrikes against Iran-backed militant groups in Iraq and Syria.

WaPo reported Biden administration intent to retaliate against the Iran-backed militias in Syria and Iraq even if no Americans are killed or injured — a lower threshold than the Trump administration used.

The president has justified not seeking congressional approval for the strikes by pointing to recent attacks on Americans and U.S. interests by the Iranian proxies, and has framed them as retaliatory.

Emerging Anti-Russia vs NATO/EU as Germany/France go Soft on Russia

Article II of the Constitution

Some worry that without AUMFs the CIC is relying too heavily on the powers granted by Article II of the Constitution as a substitute for AUMFs.

Will it Really Hamstring Future CiC president?

But scrapping the AUMFs will be a complicated affair. It underscores the limits of Congress’ power and raises important questions about what authorities a president should retain to defend Americans in harm’s way and retaliate against enemy strikes.

Emerging China Confrontation Gets Serious

=== Biden

Transportation

Labor Gains Transitory?

  • [‘They will not last': Even advocates fear workers' new gains are fleeting](https://www.politico.com/states/california/story/2021/07/02/workers-are-reaping-benefits-in-the-post-covid-economy-but-their-power-may-not-last-1387894}

Aging Power Grid

  • ['Old clunkers': California power plants break down during heat wave](https://www.politico.com/states/california/story/2021/06/30/old-clunkers-california-power-plants-break-down-during-heat-wave-1387507}

Presidential and Executive Privilege

Budget Process - Reconciliation and Threat of Government Closure

Senate Filibuster a major constraint on Presidents and Congress

US Presidents Overview

Biden-Harris

Trump

Bush Jr

Bill Clinton

Ronald Regan

Obama - dignity/style/deep voice - but little progress or achievement

  • Democratic Party lost LOTS of ground under Obama as more Democratic state legislative seats were lost under Obama than under any president in modern history.

  • “During his presidency, even as he enjoyed reelection and strong approval ratings toward the end of this term, the Democratic Party suffered greatly. . . . Democrats lost more than one thousand seats in state legislatures, governors’ mansions, and Congress during his time in office.” - Zelizer

ENVIRONMENT

  • SUCCESS Clean energy greatly increased in solar power, wind power. But sharp decline in oil/gas processes from $150 to very low actually helped economy recover.
  • Car mileage standards raised - able to get agreement. But California not satisfied and pressed for higher standards. Trump rolled back even Obama's.

Health Care

  • Insurers remained embedded in the health care system
  • On many exchanges in states, many pulled out, so only one insurer stayed over
  • BOTCHED SUCCESS - Obamacare passed
  • FAIL Health Costs skyrocketed - even "cheap plans" like HMO from low quality Kaiser vertical integrated ("Rationed?") doubled their premiums to catchup to market
  • Overall family health insurance costs nearly doubled
  • The main beneficiaries were many poor americans eg blacks and hispanics got free gold-plated health care.

Economy

  • Fed did the bulk of saving the economy from the depths of the Great Recession of 2008-10 not Obama, but actually Fed did it slowly huge accomplishment
  • Vast rise of Big Government
  • Trade deficit exponential rise to $750b/year
  • GREAT rise in inequality - very sharp rise.
  • SELLOUT to Wall Street - ??todo
    • Not one banker went to Jail, except Madoff who robbed other influential Jews
  • FAIL - Cash for Clunkers - massive waste of money - did not help unemployment, GM bailout screwed bondholders to help unions

Foreign Relations

  • FAIL - Destruction of Libya - Hillary Clinton blamed - but Obama was in charge
  • FAIL - Destruction of Syria
  • SUCCESS - Iran nuclear agreement, deescalated mid-east tensions - but not enforceable or enforced.
  • SUCCESS - historic openings Cuba after decades of unnecessary arrogant boycotting

Terrorism, Immigration, Racism

  • Guantanamo was promised in campaign to be closed - but could not get it done
  • FAIL - Immigration crisis, 2x force on border, 3x money

References

  • "A Consequential President: The Legacy of Barack Obama," Michael D'Antonio
  • The Presidency of Barack Obama - Julian Zelizer

[TOC] PKJ Incentives, Economics and Tweaks to Improve the world!

Require all-inclusive ONE price so consumers can compare!

Unlisted taxes, fees and service charges are bad for the economy - It only sounds normal because we've gotten used to it. Companies should be competing based on price and quality and not obfuscation. And the fact that companies do compete on obfuscation does not create a better economy, does not create a better experience for consumers and can, in fact, raise prices for consumers that they're buying stuff that they don't want.

  • Consider a coffee listed $2.89 but after tax it is $3.15 - people take it for granted BUT still a bit surprise, vs buying a tax-free salad from a grocery store!
  • Lets say you book a hotel room: there's an Internet fee, a parking fee. Sometimes there is something called a resort fee, even though you're staying in a place that's not a resort.
  • Ironically Amazon benefits as most of the featured items are Prime ie shipping costs are included. Ebay, also lets you compare price+shipping to allow comparing say a book that is $1 + $10 shipping vs a $5 + $2 shipping.

SRC: Catherine Rampell a columnist for The Washington Post.

2. All of us should have agents or NEGOTIATORS!

These agents know about your industry or environment in this example those kinds of jobs. She's saying, maybe there's a different job that doesn't exist yet. It'd be some intermediary you pay a flat fee to, and then they'll have a couple of conversations on your behalf when you need it. So when you get a job offer, you say thank you but "this third person is going to contact you with my questions". a. Having this intermediary negotiate for you could be a huge benefit over the course of your career. b. It would be this person's job to study your field and to know what you're worth, and this takes a little advantage away from your employer. c. There's research showing that if you make less at the beginning of your career, you're going to make less down the road. d. Often the details matter a LOT - eg getting those golden parachutes if employer jerks you around or dumps you - so you left your promising existing career for! e. Womens level playing field. Women don't quite ask for the same things that men will ask for in a negotiation. But there's also evidence that when women ask, it's not received the same way as when men ask. By having an intermediary eg a MAN, you can level the playing field.

  1. Negotiating for MORE SALARY by - Aaron Rodgers is the quarterback for the Green Bay Packers. What is different was his

    I'm in a multimillion-dollar salary renegotiation with my bosses, but whatever. I've got an agent. He's dealing with it. I'm just going to keep practicing football.

  2. ALL people getting a job go through this. You feel "I'm getting a good job, but this is the most stressful thing I've ever gone through."

SRC: Abigail Wozniak - a labor economist at the University of Notre Dame.

[TOC] Understanding Central Bankers - Inflation vs Unemployment

New Zealand TALK UP its POLICIES eg 2% inflation rate and Now Central Bankers copying them

Inflation determines how many people in the U.S. have a job. It has the power to wipe out our savings accounts. It is quite possible that bankers might have just spent the last 22 years targeting the wrong number

  1. For decades New Zealand had massive inflation, which meant prices were going up, and everyone's money was losing value. This can happen when there's too much money floating around in economy and everyone tries to spend it on not enough stuff. None of us in our lifetimes, had experienced 2% inflation. We'd all been brought up with double-digit inflation. It was considered extremely difficult to get to 2 percent. And the government had tried everything to lower inflation for nearly two decades but was unable to do it.

    • Banned car driving to stop gas prices from going up
    • Banned businesses from raising prices for a year.
  2. At that time, other central Bankers had different ways of managing inflation - but all these targets were aimed AT KEEPING INFLATION LOW - "its our job"

  3. Some central banks have a monetary supply target, which just means they're capping how much money is printed every year.
  4. Others have an employment target, like what's the perfect amount of people with jobs for the healthiest economy?
  5. Some have an interest rate target - trying to pin down, what's the right interest rate for loans?

  6. Arthur Grimes chief economist at New Zealand's central bank, was assigned to the New Zealand inflation problem

  7. He traveled the world trying to study approaches of central bankers
  8. He came up with DIRECT Targeting of Inflation > - set an ideal level of inflation and drive the economy toward that. THIS WAS FIRST TIME IT WAS TARGETED. It took New Zealand's central bank three years to develop this whole new system.
  9. Arthur says, I'm not going to give you a number. I will give you a range eg Zero to two by '92.
  10. He had proven that sharing your economic secrets is a good thing for central banks - TALK IT UP!

  11. Why and How 0-2% inflation range works! IT IS NEUTRAL and doesn't affect well being.

  12. If inflation is 0% - you don't worry - all prices are going to stay rock solid
  13. If inflation is 1% - prices of basics will go up slightly but it won't change consumer expectations or worry much about it!
  14. So upto 2% - it is like inflation at which it STARTS to get a bit problematic.
  15. A little inflation is actually good for the economy - 2 or 3%.
  16. If inflation is very high double-digit, etc. it is the process of bringing it down - that hurts people. It is a painful process of high rates, low credit extension.
  17. Once the target was set and inflation was say 9%? at that time, Don Brash a tough guy was hired who presented himself as someone who didn't give a fig if it hurt people - just had to MEET THE TARGET? He did it by restricting how much money regular banks had in their vaults, which affects how much money everyone has, which would reduce demand, and would cause a huge spike in unemployment.
  18. However reality was that employees to cope with high inflation needed their wages raised a LOT, which caused inflation even more.
  19. THE WAY IT WORKS IS YOU TALKED IT UP A LOT! Trust me, we will drive it down WHATEVER IT TAKES.
    • This means that employers could tell raise seekers - just wait, Don Brash is going to get it down and not cause even more inflation!
    • Similarly, businesses can be told - dont raise prices for your goods - WE WILL FIX IT!
    • However, people and companies would not listen - so they applied bitter medicine to get unemployment above 11% - A LOT OF PAIN!
    • At the same time, New Zealand did a LOT of reforms - reducing public jobs bloat, privatizing public companies, etc.
    • Realizing that these targets were real, people and companies started to listen
    • Net net instead of '92 it got controlled by '91.

Central Bankers now target 2%

  • Central bankers realized the power of this way of TARGETING the inflation!

a. USA HUGE SHIFT on January 25, 2012, then-Fed Chair Ben Bernanke announced the Fed had an explicit goal of keeping this powerful number at 2%. - Actually internally the Fed rates have had this internal target since summer of 1996 as Alan Greenspan never announced his secret inflation target. - Partly reason for this secrecy is people might claim that Fed endorses or targets people lose their money at 2% per year!

b. Some economists say 2 percent inflation - that's just too low to get us out of a bad economic situation like a recession. They say a 3 or 4 percent target would give us more wiggle room. But that would shrink peoples savings faster - as low inflation does benefit most people. - A higher inflation target benefits borrowers who tend to be those with less income as it allows LESS unemployment. - On the other side of that, those with higher income and greater wealth who are the lenders, you know, would not necessarily want to raise the inflation target.

Modern economies - better target is higher due to different world in 2020 than 1992

  • NZ now targets 1-3% not 0-2%

How Rates control Inflation

It used to be central bankers had a powerful lever to guide the pace of the economy: The ability to raise or lower interest rates. Increase interest rates a bit and it would push down investment, push down inflation, help prevent the economy from overheating and crashing. Or, in the other direction, they could lower interest rates and it would boost investments, boost spending, help to kickstart a slow economy. But lately, the lever hasn't been behaving like the textbooks say it should. The old relationship between interest rates and inflation isn't holding anymore.

  • Late 1970s inflation was very high, by 1980 at 13% partly after OPEC cartel raised oil prices for global economy to get more money for their economies. Paul Volker cranked up interest rates to 20% and it worked - by 1983, inflation was down to just about 3%.

  • Super-high interest rates would make it expensive to borrow money. Consumers wouldn't spend as much. Businesses wouldn't invest as much. The economy would cool down.

  • Lower interest rates, borrowing is easier, so people and companies will spend and invest more, and inflation goes up. Raise interest rates, inflation goes down. Lower interest rates, inflation goes up.

Interest Rates can't control Inflation ANYMORE

  • However now in 2019, interest rates dont work to control. At 0% rates, inflation is still close to zero! globally, the advanced central banks have been putting a lot of accommodation into their economy, and yet, not seen inflation rise.

  • In 1973 era had Flat wages, below target inflation, rising EPOP. It says flat wage is below target inflation, rising EPOP, which I believe means employment to population ratio as the fraction of people with jobs in the population.

  • Since 1980, productivity and hourly compensation has been diverging remarkably since 1980. Basically - wages really haven't grown the way economists expected them to even though productivity has risen all this time. Again FED has failed as wages haven't grown all that much since the early 1970s.

  • From 2009 it gets worse. Global interest rates have been low. And unemployment has come way down; it's less than 4 percent. But wages? Wages have not gone up.

  • Meanwhile since 2009 the top 1%/10% have increased their wealth greatly! A bigger and bigger share of profits has been going to all these big companies, and a smaller and smaller share has been going to workers.

Policies to manage Unemployment rates

  • Very low Unemployment is bad for Economy
  • Employers have very little negotiating leverage
  • Wages rise rapidly
  • Inflation rise rapidly

WHAT TO DO? Interest rates alone are very Imperfect for economic progress!

Monopoly power of Mega-Corps, Consolidating/M&A has greatly reduced Public companies

  1. Pricing Rollbacks due to Pricing power of massive supply chains
  2. Amazons and Walmarts offer low prices really well and keep margins high, while forcing rollbacks!

  3. Globalization - competition - "Commie slaves" suffer so we pay less, MNCs make Mega-profits

  4. Automation, Robots, IT software, Data Driven IE/Optimization - all make productivity rise - this helps keep inflation down

  5. Consolidation Facebook, Apple, Amazon, Google, etc. have been concentrating all of this power in their markets. Shipping, banking, health care. Airlines, insurance, utilities - all consolidating. .. These giant companies are getting more and more efficient.

  6. Low borrowing costs => Increasing Capex would normally allow more investment, FDI to China, etc and again reducing costs Low rates are making the economy act weird through borrowing. It used to be to become a giant company, the important thing was to build the best factories and buy the newest machines.

  7. Companies investing more in intangible capital - things like patents and software.

    Even in Walmart in retail a low-tech - but it HAS invested huge amounts of money in building up better software, supply chain, RFIDs, POS, inventory management, automed lights management, energy management, solar on roofs, reducing losses due to stealing etc. By owning the trucks and warehouses, it understands better than any other company how to move these trucks around the warehouses really efficiently. Ironically, by using capital MORE efficiently, companies may not need as many loans to build factories and warehouses that they used to - so monetary (rates) policies may not affect inflation or employment as much as before.

  8. USD as reserve vs Globalization has shift Monetary levers to China, Europe, Japan etc. where goods are actually made!

    Instead of Fed controlling the interest rates and inflation - they have become irrelevant Money is generated in China by itself - and their state owned banks lend to SOE, which supply cheap commodities to the manufacturers. Also the massive population has hundreds of willing workers that fight to get jobs, and controlled by CCP to be disciplined (ie live like slaves) keeping wages low (or used to). Chinese banking system operates in its own world! JCB has kept yields super low ostensibly to fight deflation, but it also keeps yen super low as carry trade has people selling yen! Europe has 10year gilts near or below zero in Germany, etc - as this allows cheap money there as savings rates are high like in Japan. Bottom line, money supply and employment that are affected are in these hard economies - Japan, China and Europe, not in USD Reserve based consumer US economy.

  9. Larger company power can drive down wages!

    Even if you haven't got unions, what larger firms in particular can do is they can actually drive down wages below what the competitive level is.

SRC: John Van Reenen, Professor in the Department of Economics at MIT and the Sloan School of Management.

[TOC] Tax Policy Disruption

Why the Wealthy keep on getting Richer

  1. Those with Capital benefit more than everyone else
  2. Normally the rate of return on capital will be higher than the rate of economic growth ("r>g") and, as a result, the wealthy will continue seeing their fortunes increase faster than everyone else's. -- Piketty author of Capital in the Twenty-First Century, ~2013.

  3. First to access other people's money (Money in banks)

Wealth Tax necessary to reduce Inequality


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