The Trump vs. Clinton Election Enters the Realm of Farce

From left: former Secretary of State Hillary Clinton and Donald Trump

The 2016 presidential campaign confirms what Marx wrote: “all the events and personalities of great importance in world history occur, as it were, twice… the first time as tragedy, the second as farce.” Karl, not Groucho, Marx.

We enter the realm of farce. It’s the economy, Stupid!

We are experiencing a reprise of the political paralysis of the 1970s, stagnation replacing stagflation. Jimmy Carter tackled the malaise in widely noted speech on July 15, 1979. This was later derided as his great MEOW (“Moral Equivalent Of War”):

The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.

The erosion of our confidence in the future is threatening to destroy the social and the political fabric of America.

The confidence that we have always had as a people is not simply some romantic dream or a proverb in a dusty book that we read just on the Fourth of July.

The symptoms of this crisis of the American spirit are all around us. For the first time in the history of our country a majority of our people believe that the next five years will be worse than the past five years.

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What ‘JFK and the Reagan Revolution’ Reveals About Trump

Donald Trump (photo credit: Darron Birgenheier via Flickr, CC BY-SA 2.0)

Remember prosperity? Want it back? Here’s the secret formula, which has always worked and would work again: Cut marginal tax rates and restore integrity to the dollar.

Donald Trump is campaigning on meaningful marginal tax rate cuts and implying, with his offstage praise of the gold standard, a solid instinct for monetary integrity and how to produce it. One hopes so as it requires both together.

Here’s the brief. Lawrence Kudlow and Brian Domitrovic have just published what deserves to be the most important book of the 2016 presidential election cycle: JFK and the Reagan Revolution: A Secret History of American Prosperity. It provides a solid understanding of the key issue of the 2016 race — the economy.

Reagan made “Supply-Side” famous by campaigning on and then enacting most of the Kemp-Roth 30% across-the-board tax rate cut. But John F. Kennedy was the original Supply-Sider. The book’s Big Reveal: Jack Kemp designed this tax cut as a direct copy of Kennedy’s own.

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Read the full article at Forbes.com.

Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’s Essay on Money, is American Principles Project’s Senior Advisor, Economics. Continue Reading

Trump’s Knockout Punch Opportunity

Donald Trump (photo credit: Gage Skidmore)

In the first of the three presidential debates, only Trump’s handlers scored his performance as better than a draw. Both candidates jabbed and scored some points against the other. Pity that Trump did not launch a haymaker against Hillary’s big glass jaw on the economy.

Last May, The New York Times reported:

Hillary Clinton already has an assignment for her husband, Bill Clinton, if they return to the White House next year. The former president, Mrs. Clinton told voters on Sunday, will be “in charge of revitalizing the economy.” “Because, you know, he knows how to do it,” she said.

Less well reported was the progressives’ fury kindled by this. The neoliberal Bill Clinton, who, mostly embellishing on the Reagan/Kemp Supply-Side legacy under pressure from a newly Republican Congress, cut the capital gains tax; mended, rather than ended, a disgraceful welfare regime; and materially advanced free trade.

Massive job growth ensued. After an initial two years of soggy economic growth, America generated over 20 million new jobs under Clinton, putting, among other things, the federal budget into surplus. This, however, did not endear Clinton to the dogmatic progressive left.

The followers of Bernie Sanders, with whom Hillary Clinton then was locked in mortal primary combat (and whose election day turnout she now needs), were outraged. Clinton immediately backpedaled and adopted huge swaths of the Sanders economic platform.

This made her vulnerable in the general election. Candidate Clinton’s initially embracing and then distancing herself from President Clinton’s economic policy success represents a dangerous flip flop. Continue Reading

After the Conventions, 1.2 Percent Growth Means Hillary Is In Trouble

The Tempest by James Henry Nixon

The splendid national political conventions are over. These inevitably put one in mind of The Tempest:

Our revels now are ended. These our actors, As I foretold you, were all spirits and Are melted into air, into thin air: And, like the baseless fabric of this vision, The cloud-capp’d towers, the gorgeous palaces, The solemn temples, the great globe itself, Yea, all which it inherit, shall dissolve And, like this insubstantial pageant faded, Leave not a rack behind. We are such stuff As dreams are made on, and our little life Is rounded with a sleep.

We awaken from Hillary’s stirring acceptance speech to discover that The Washington Post reports the second quarter growth rate at 1.2 percent, half of analysts’ expectations.

Note to Self:

2.4 percent is disappointing. 1.2 percent foretells probable political catastrophe for the incumbent party. (Meaning Hillary.)

Consider the implications of The New York Review of Books’ Michael Tomasky’s recent observation:

There’s no disputing the fact that, absent a major event like a terrorist attack or a legal indictment, the economy is the most important factor in any presidential election. More specifically, as John Sides and Lynn Vavreck argue in The Gamble, it’s the economic conditions that obtain in the last few months or perhaps the last year before the voting.

Tomasky is a principled “until the last dog dies” Hillary loyalist, appalled by Trump (as, less so, by Sanders). Yet also he is one of the most honest and rigorous political analysts at work, unblinded by his own neoliberal preferences. Continue Reading

Christie Backs Historic School Funding Reform, Tax Cut

New Jersey Gov. Chris Christie (photo credit: Gage Skidmore)

Yesterday in Somerset County, New Jersey, Gov. Chris Christie proposed an amendment to his state’s constitution that, if enacted in a referendum next year, will apportion state aid to local school districts on a per pupil basis.

What would this mean when fully phased in? Each district would receive $6,599, multiplied by the number of students going to school in that district. Aid to special education programs would continue unchanged. This would replace the current system imposed 40 years ago by the New Jersey Supreme Court in which 59 percent of the state aid goes to 23 percent of the student population.

Christie was of course immediately accused by Democrats and New Jersey media of succumbing to racism, since evening out the aid system would reduce budgets in the poorest districts. But the governor noted that the greatest beneficiary of the current system, Asbury Park, has a high school graduation rate hovering around 66 percent, based on a state subsidy of $33,699 per student. He also noted that inner cities like Newark have charter schools achieving superior performance outcomes with per pupil costs about half that of the conventional public schools. Given this track record, it would seem likely that inner-city students and parents will be the biggest winners if the reform becomes law.

Democrats represent many of the suburban school districts that would be able to enjoy the largest cuts in property taxes, a category in which New Jersey leads the nation. Continue Reading

Can the GOP Unite to Restore Economic Prosperity?

From left: Donald Trump and House Speaker Paul Ryan (R-WI)

Last week Donald Trump met with Jack Kemp protégé House Speaker Paul Ryan. As the Washington Post aptly put it, “Ryan has the House. Trump has the party.” To quote the founder of the Republican Party, Abe Lincoln, who was quoting Scripture: “A house divided against itself can not stand.”

This meeting was an iconic moment that distilled the dynamics and douleurs of GOP 2016 perfectly. The modern GOP is the House That Jack — Jack Kemp — Built. That House is in disarray.

Jack Kemp championed, and inspired presidential aspirant Ronald Reagan to adopt, the economic formula that rescued America from decades of stagflation. Kemp unleashed an era of epic world prosperity.

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Begin with an across-the-board reduction of marginal tax rates, now in the hands of Kemp acolytes and trusted Ryan and Trump advisors Kudlow and Moore. Conjoin it with the resurrection, far easier than Speaker Ryan or Mr. Trump may think, of Jack Kemp’s Gold Standard Act of 1984.

Ryan’s chief of staff Dave Hoppe, once upon a time Kemp’s chief of staff, was a key architect of the Gold Standard Act, together with Lehrman and former Kemp economist John Mueller. Together the tax rate cut plus gold standard hold the essence of Kemp’s recipe for prosperity and justice for all.

Fuse Trump’s intuitive grasp of the spirit of equitable prosperity with Ryan’s fine-tuned grasp of the way the world works and critical mass is achieved to the benefit of both and of America.

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Ted Cruz Just Hit a Grand Slam on Economic Growth on CNBC

Sen. Ted Cruz (R-TX) (photo credit: Gage Skidmore)

On April 15th, Joe Kernen tee’d up his latest CNBC “Squawk Box” guest, Sen. Ted Cruz, perfectly. Kernen:

Growth, around the world, economic growth almost cures all ills.  It cures the sentiment we have right now, the feeling people aren’t getting ahead. Helps you pay down deficits. Helps everything.  But we’re in a weird world right now. … I wonder if you know how to explain the cause and the cure.

To which Cruz replied to perfection:

Growth is foundational. My number one priority is growth. Growth. Every other problem we’ve got, whether it’s unemployment, the debt and the deficit, whether it is strengthening and securing social security and medicare, whether it is rebuilding our military and keeping us safe, you’ve got to have growth to make it work. And we have been trapped in stagnation for the last seven years. If we don’t turn that around nothing else gets fixed. …

There is a clear cause and effect. If you look back through history every time we have out of control spending, taxes and regulation we get what we’ve got now. We get this stagnation. … Tax reform and reg reform are the two most potent levers. …

Joe, upping his game, on Reagan’s restoring rapid economic growth in contrast to the limping economy of his predecessor:

… It was like someone flipped a switch. …

To which Cruz replied:

You mentioned monetary policy. Monetary policy as well matters enormously. … We’ve been on this roller coaster with the dollar, it’s up, it’s down, commodities go sky high, they go down, they go sky high.

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The Washington Post Defames Cruz’s Strong Prosperity Formula

Sen. Ted Cruz (R-TX) (photo credit: Gage Skidmore)

The Washington Post Wonkblog‘s Neo-Keynesian Matt O’Brien — who, aptly enough, tweets as @ObsoleteDogma — pauses to attack Neo-(Classical)-Liberal Ted Cruz in “Does Ted Cruz think his tax plan would cause a Great Depression?

Spoiler alert. There’s a rule of thumb in journalism called Betteridge’s Law of Headlines. It states: “Any headline that ends in a question mark can be answered by the word no.”

So, the short answer is: no.

The center-right nonprofit Tax Foundation has scored Ted Cruz’s 10 percent flat tax (plus business transfer tax) as the most economic growth inducing of any of the presidential candidates’ tax proposals, generating 14 percent after tax income, over baseline, over 10 years.

By contrast, the Tax Foundation scores Donald Trump’ s plan as an 11 percent GDP increase, provided that the tax cut — meaning its $10 trillion in extra deficits, more than Obama’s — “could be appropriately financed.”  The Tax Foundation scores Hillary Clinton’s tax plan as reducing GDP by 1 percent. Bernie Sanders tax plan? Negative 9.5 percent.

Now that’s a Great Depression! Matt O’Brien, call your office.

After making some rather hard-to-follow (but presumably 100 percent Obsolete Dogma compliant) arguments against Cruz’s tax plan, O’Brien goes on to observe:

So the Smoot-Hawlely tariff couldn’t have been the reason unemployment got up to 25 percent in the 1930s. The most you can say is that it might have added a couple of percentage points to that, but nowhere near as much as what really did cause the Depression. 

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Revealed! Donald Trump Promises Policies to Bring About the Greatest! Depression! Ever!

Donald Trump (photo credit: Gage Skidmore)

CNN recently reported on GOP presidential front runner Donald Trump’s stance(s) about the Fed:

[J]ust two days ago, Trump tweeted that he thinks the Fed should be audited. This is something that fellow Republican candidate Ted Cruz supports as well as former candidate Rand Paul.

Trump chided Cruz in his tweet for missing a Senate vote on an “Audit the Fed” bill in January. The bill failed 53-44.

Trump, in his usual way, by way of baiting his rivals and confusing voters, omitted two crucial points.

First, Cruz’s Senate vote would not have led to a different outcome. It would have been purely symbolic. And Cruz was one of the original co-sponsors of that legislation, and of the even more important Brady-Cornyn Centennial Monetary Commission. Ample symbolism. CNN:

Trump’s tweet was the first time he specifically came out in favor of a full audit of the Fed. Could an audit make the Fed great again? Hmm.

Trump’s tweet looked, and looks, like an opportunistic way to bash a rival. Not a serious proposition. If Trump believed that auditing the Fed was, in the words of his tweet, “so important,” why did he wait until late February 2016 to say so?

And why in a tweet rather than in a major policy speech? CNN:

But Trump actually has already accused the Fed of being too political.

In an interview with The Hill in October, Trump said Yellen was keeping interest rates low so President Obama “doesn’t want to have a recession-slash-depression during his administration.”

That interview took place before the Fed raised rates for the first time in nine years in December.

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The Bernie Sanders Philosophy: An Equal Share Of Misery

Sen. Bernie Sanders (I-VT) (photo credit: Michael Vadon via Flickr, CC BY-SA 2.0)

Finally America gets to hear from real voters instead of us knuckle headed pundits. One hopes that those Hawkeyes are paying attention to what the Tax Foundation, the umpire of all things tax policy, recently announced.

Sen. Sanders’s tax plan would have the effect of shrinking the economy, and my (and, more to the point, your) paycheck by 10%. It’s already a scrape to get by. I really, really don’t want a 10% pay cut. Do you?

Winston Churchill said in a speech in the House of Commons on October 22, 1945: “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.” Therein lies a problem and perhaps an intractable one for Democratic Socialist Sanders’s presidential aspirations. Socialism, even Democratic Socialism, by and large, and with some notable exceptions, has proven a recipe for misery.

Trigger Warning for my Conservative readers: I love Bernie Sanders.

Microaggression Alert for my Progressive readers: I won’t vote for him for president.

First things first. How do I love thee, Sen. Sanders? Let me count the ways!

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Read the full article at Forbes.com.

Ralph Benko, internationally published weekly columnist, co-author of The 21st Century Gold Standard, lead co-editor of the Gerald Malsbary translation from Latin to English of Copernicus’s Essay on Money, is American Principles Project’s Senior Advisor, Economics. Continue Reading