Of Thee I Sing Heading AuthorsThe one thing all food fights have in common is that they leave an awful mess. Well, the Republicans and Democrats in Washington are engaging in one lulu of a food fight and the resulting mess will take quite a while to clean up. The stain and stench are apt to hang around for many years and many Administrations. The dueling majority and minority reports of the House Intelligence Committee are merely the latest volleys in this very long running food fight.

The hall monitor couldn’t say, for sure, who really started it. The cause celeb for the current round in this food fight, however, was the rather creepy decision to include as justification for an FBI application for a FISA (Foreign Intelligence Surveillance Act) warrant to tap the telephone of a private citizen (Carter Page), a rather creepy memorandum known as the Steele Dossier. The Steele Dossier is creepy because it was paid for by the Hillary Clinton Campaign and the DNC, which the FBI knew, but failed to mention in its FISA application.

The Steele Dossier, the reader will remember, is the gumshoe work of Christopher Steele that former FBI Director James Comey described as “salacious and unverified.”

Part of the justification cited in the application for the FISA warrant was a Yahoo News story about a trip to Moscow Mr. Page took in July 2016. This was represented in the FISA application as corroboration of information about Mr. Page in the Steele Dossier. The problem is that the news story wasn’t corroboration of anything because it was apparently planted by none other than Christopher Steele himself.

We don’t know if the Steele Dossier was a major contributing factor in the decision to grant the FISA warrant but, if it was, that would seem to us to be, well, rather creepy too. After all, the Clinton campaign and the DNC routed over $160,000 to Steele rather circuitously through a law firm, and the now notorious operations research firm, Fusion GPS, none of which was, specifically, divulged to the FISA Court.

This brawl is but the latest iteration of our body politic at war with itself. Our leading and most respected civil libertarians, regardless of party, are aghast at the avalanche of leaks emanating from within our intelligence community. Leak upon leak by operatives in our own government of telephone conversations, discussions and internal files suggest a staggering level of snoopery and leaking from which no one, public or private seems immune.

So just what does the so-called Nunes memorandum (the report released by the Republicans on the House Intelligence Committee) tell us. One could easily make the case that the FBI’s FISA application to eavesdrop on Carter Page was creepy and inappropriate…because it was. But here’s the thing: whether Carter Page is an innocent civilian or a nefarious character isn’t relevant, if the FISA application to bug him sullied the rigorous standards FISA establishes before the government can bug a private citizen.

It appears to us, and we’re no fans of President Trump, that the application to bug Page in an effort to find dirt on Trump made a bit of a mockery of FISA’s stringent standards for obtaining such a warrant.

The now disclosed animus toward Trump of individuals involved in the investigation is, of course, troubling. FBI agent Peter Strzok was eventually pulled from the investigation when his avowed hatred of President trump was revealed in texts between him and his paramour.

It gets worse. According to the memo released by the House Intelligence Committee Republicans, Christopher Steele told associate deputy attorney general Bruce Ohr that he was “desperate that Donald Trump not get elected and was passionate about him not being president.” That tidbit was also left out of the FISA application, as was information about Ohr’s wife working for Fusion GPS.

All of this creepiness is, however, dispositive of nothing. The Steele Dossier simply wasn’t the basis of the government’s investigation into Russian meddling in our election, nor was it the basis of the Mueller investigation into whether or not there was collusion between the Trump campaign and the Kremlin. Trump inner-circle wannabe George Papadopoulos was already in the investigative crosshairs as far back as July 2016 and he has already pled guilty to lying to the FBI.

We understand that Special Counsel Robert Mueller may yet bring a case against President Trump. We also believe that if he does, it will be justified by the evidence. Mueller has served the country with uncommon distinction and the partisan attacks mounted to impugn his integrity are regrettable. In fact, the considerable efforts to impugn the integrity of Robert Mueller may be the creepiest aspect of this entire sorry affair.

As we wrote at the top of this essay; food fights leave an awful mess.

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Immigrants from Countries Trump Doesn’t Like

Of Thee I Sing Heading AuthorsWhile it isn’t exactly clear whether President Trump considers certain countries to be “holes” or “houses” consisting of, well, you know what, it does seem safe to assume that our President doesn’t look kindly upon prospective immigrants from much of Africa, or from countries whose people were transplanted from Africa.  And, we assume, he doesn’t look kindly upon would-be immigrants from other countries which are identified with extreme poverty such as, perhaps, Bangladesh or Sri Lanka.

For our purposes, today, we will not relitigate his desired ban on immigrants from those Muslim countries that our State Department has identified with terrorism.  Instead, we’ve endeavored to understand just who typically applies to legally immigrate to the United States from most of the places that are, in President Trump’s view, “holes” of dubious desirability.

Let’s begin with Bangladesh.  Like so many immigrant groups, the Bangladeshis who arrive in the United States may have little money, but a wealth of determination to succeed, and to contribute to, and benefit from, the American experience. Putting aside our well-honed, pre-conceived notions, Bangladeshi immigrants are actually better educated than the general US population, both at undergraduate and graduate levels. Actually, the median household income for Bangladeshi Americans is around $54,000, or 8 percent higher than the US average of $50,000. Our Bangladeshi emigres hold more bachelor’s degrees than the U.S. population overall, and they are more than twice as likely to hold advanced degrees. Bangladeshi-Americans actually rank in the top 10 percent of U.S. household income distribution. In general, employment among the Bangladeshi closely resembles employment of the general U.S. population, with both groups having similar rates of labor force participation, employment, and share of managerial or professional occupations.

Now, most Americans, we would guess, think of Sri Lanka as a very poor country and therefore assume that Sri Lankan Americans are probably a drag on our economy. But that’s not the case either. Sri Lankans who come to America are generally quite well educated. With a median income of $74,000, Sri Lankan Americans are the third most successful Asian American group (tied with Japanese Americans with respect to income). Additionally, 57% of Sri Lankan Americans over the age of 25 have a bachelor’s degree or higher. Among holders of graduate degrees Sri Lankans (54%) along with Indians and Taiwanese (56%) and Israelis (51%), rank higher than graduate degree holders of all other foreign-born Americans.

Much has already been written about how President Trump laments that America is not taking in enough immigrants from Norway, and, perhaps, too many from Africa. Well, we have news for President Trump. Africans who apply to immigrate to the United States are well educated and pretty industrious. Four out of ten come to America with a bachelor’s degree or higher. That compares to less than 30% of native-born Americans who hold bachelors degrees, and, incidentally, African emigres hold higher degrees in greater numbers than all other foreign-born adults. This isn’t really surprising when one thinks about it. Our immigration policy, like that of most countries, places a high premium on ambitious and resourceful immigrants, so the more accomplished the applicant the greater the likelihood he or she will get a green light to enter the United States.

How about high school diplomas? About one-third of immigrants overall lack a high school education, but less than 12% of African-born migrants come without a high-school diploma. Interestingly, that’s just about the same as native-born Americans who don’t finish high school.

Nigeria is the most populous nation in Africa. And, we would guess, most Americans probably assume that Nigerian immigrants would be among the least educated coming to the United States.  Not so.

The education level of Nigerian applicants is among the very highest in the U.S., even higher than those of Asians. Seventeen percent of Nigerians come to the United States with master’s degrees. Language? By and large not a problem with African emigres. About three-quarters of African immigrants speak English.  And, for the record, they commit violent crimes at a significantly lower rate than individuals born in the United States. President Trump may really believe that Africa “is not sending us their best people,” but, actually, Africa is.

Economist Edward Lazear recently made an interesting observation. He speculated that if one were to guess about the education levels of immigrants to the U.S. from Algeria, Israel, and Japan, most people would assume that Algeria would rank third. But they would be wrong. Algeria ranks first, Israel second and then Japan.  And that’s entirely logical. Algerians who are well educated have relatively few opportunities to succeed and get ahead in Algeria. In other words, their future prospects are poor and certainly not consistent with their educational achievements. But a well-educated citizen of Japan or Israel can, in all likelihood, do just fine by staying home.

Now, we certainly believe that applicants who desire to immigrate to America must also embrace democracy, and really believe in freedom and justice for all. We believe immigrants to America should jettison their native prejudices, whatever they are. But we also believe that it is fundamentally wrong to attribute to those individuals who want to leave impoverished, corrupt and oppressive nations the very attributes they are fleeing.

So, just as one can’t judge a book by its cover, it is just as wrong to judge an aspiring immigrant by his or her country of origin.

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The Schumer Shutdown

Of Thee I Sing Heading AuthorsYes, yes, we understand there is plenty of blame to go around, and we could have easily written this essay assigning the blame to President Trump. But that’s not where we think blame belongs, although neither Party comes to this impasse with clean hands.

There’s no question, having watched this debacle unfold, blame can easily be envisioned in the eye of the beholder. But here’s the thing, there was really nothing substantive in the deal to keep the government open that the Democrats couldn’t have lived with. The Democrats could have easily pocketed everything that was offered in the spending measure to keep the government open, such as a commitment to resolve DACA by March 5th, as well as a six-year extension of the Children’s Health Insurance Program (CHIP).  Instead, they put DACA in jeopardy as well as the Children’s Health Insurance Program. They could have easily worked for a final DACA deal during the normal function of government, and the odds are that the Administration would have worked with them.  Instead, the Democrats opted to shut down the government, confident the public will blame the President and the Republicans. We’re not so sure. There was simply nothing in the proposed legislation to fund the government with which the Democrats fundamentally disagree.

So, this is a pointless shutdown of the government.  The Democrat’s talking point, which they have been reciting at every opportunity, is apt to wear thin very quickly. Schumer and company are arguing (to a fault) that this is the first time in history that there has been a government shutdown when one party has controlled all three branches of government. It is a dramatic, but also a meaningless talking point. Given that the Senate rules require a 60-vote majority to keep the government open, the Republicans cannot keep the government open without the support of Democrats. People understand that, and we think public opinion could turn around faster than you can say “only eight percent of the people have any confidence in Congress.”

The Democrats are counting on the fact that most Americans want to solve the DACA problem once and for all.  We doubt, however, that most Americans will buy into the proposition that DACA must be solved right now, and at all costs, even at the cost of closing the government. The Democrats are risking turning the public sour on a winning issue by overplaying their hand. The Democrats are betting that they can close down the government with impunity over the issue of protecting the so-called Dreamers and, we think, that may be a really poor bet.

We think protecting the Dreamers is the humane and decent thing to do.  Shutting down the government, however, is not the way to accomplish that. The strategy of using a government shutdown creates a real dilemma for most Americans. Most Americans, we think, will assign a higher priority to keep the government (which they pay for) open than they will to immediately protect the Dreamers.

The public should not have been put in this position, and they may very well punish the Senators who decided to close the government over this issue.  Congress had, and has, the option of funding the government now and dealing with DACA by the March 5th extension provided by President Trump. As Bill Scher of Politico observed, “if you deny passage of a reasonable bill to keep the government open, one without poison pills, then you are responsible for the resulting shutdown. Period. End of story.”

The vast majority of Democrats voted to shut down the government. They think, a chorus of their members reciting talking points about how Republicans control all three branches of government will immunize them from blame. We doubt it. The Senate, both Democrats and Republicans, should have focused on the budget bill solely as a spending measure, not as a tactical opportunity to legislate the resolution of an issue that ultimately needs to be addressed as part of long-overdue comprehensive immigration reform.

Many Americans are confused as to what DACA is and isn’t. DACA confers very few entitlements other than the right to temporarily remain and work in the United States without fear of deportation.  It is little more than a temporary work permit. Only immigrants who had lived in the U.S. since 2007, who came before age 16 and who were younger than 31 on June 15th, 2012 were eligible to apply for DACA. Today DACA provides only a temporary reprieve for these individuals because they must apply to renew their DACA status every two years.

DACA does not make recipients eligible for any other federal benefits, and DACA recipients must still sign up for selective service if they’re men between the ages of 18 and 25. They cannot obtain federal student loans, nor can they apply for Obamacare.

We also think the government shutdown may exacerbate another major issue. While an estimated 1.7 million people were eligible to apply for DACA protection, fewer than half – about 800,000 – actually registered for the program. The estimated 900,000 who, perhaps, were afraid to register or who didn’t trust the political process, are consigned to permanent limbo or eventual deportation, and have little hope, if any, of following in the footsteps of those who did apply. After this funding debacle, we think the people will have little appetite to even consider giving them another opportunity in the future to find even temporary legal status.

All of this, for political gamesmanship.

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When the White House Becomes the Fun House: Distorted Mirrors and Scary Sounds

Of Thee I Sing Heading AuthorsDid he say that, or didn’t he? Looks like he did, but maybe not, hard to tell, it was racist and vicious, but not that racist and not that vicious, but that one heard it, yet that one didn’t recall, and she said he didn’t use that exact phrase, but he said the quote was pretty much accurate.

Welcome to the Fun House.

So, here’s what we know. President Trump said something in reference to certain countries (or immigrants from certain countries) that was rather uniformly heard as a repugnant utterance. The “shithole” noun was either used or, depending on whose earwitness account you listen to, something that meant the same thing was used by the President of The United States to refer to places from which he doesn’t want to accept immigrants.

Having reviewed everyone’s version of what they heard or didn’t hear at the infamous White House meeting, we can adduce that President Trump doesn’t want people coming to the United States that aren’t, well, Aryan. Norwegians are definitely welcome and, we assume, so are Danes, Swedes and those from the land of his forefathers, Germans. Yes, President Trump, they were from Germany, not Sweden.

Well, we think all those Nordic types are great too. They share wonderful DNA that is full of great potential, promise, creativity, and brain power. The thing is, they pretty much share it with all of humanity. “Race” is a social construct. We recognize that our President doesn’t understand that, but qualitatively, Race is meaningless. It may describe how people look, but it has relatively little other value. It has absolutely nothing to do with a person’s potential to contribute mightily to society.

Yes, there are pathetically poor and disadvantaged areas of the world, but it has been demonstrated, time and time again, that every race and every socio-economic group, and every geographic area has produced great thinkers, great artists, and great achievers. And what is most important, it is the country that welcomes these immigrants that benefits from their potential. That’s why they emigrate out of those horribly disadvantaged places to the places that provide opportunity and which, in return, benefit the most from the talent they and their progeny provide.

That doesn’t mean we should have open immigration for all comers from all nations. Any country can be overwhelmed by unrestrained immigration, and no country can afford to have the needs of immigrants, or any group for that matter, drain its resources. But it would be insane to blacklist the citizens of any country from immigrating to the United States, because of their country of origin. Let us be more direct; it would be stupid.

What noun President Trump actually used, or the context in which he used it, has dominated the news cycle for three days now with only intermittent relief coming from an “oops” moment regarding a missile attack that either was or wasn’t aimed at Hawaii or the tragic mudslides in Montecito, California.

What is clear is that President Trump doesn’t want people coming here from what he considers disgusting places, otherwise referred to by some as shitholes. Now, to be fair, the President says that’s not exactly what he said, but, according to the President, he did use pretty rough language. Senator Durbin of Illinois says the President used “hate-filled, vile and racist remarks. Senators Cotton and Perdue said they don’t recall these exact words being used, but Senator Lindsey Graham said the quote was, basically, accurate.

Does the President really wonder about the value and contributions of Americans of African heritage? Doesn’t he realize that would have precluded Americans such as Condoleezza Rice, or Colin Powell, or Ben Carson or Mia Love, the promising young Republican from Utah who is of Haitian ancestry for Pete’s sake?

Doesn’t the President know that the children of very poor, destitute immigrants from a variety of what he would call shitholes and hellholes have been among the most creative and productive citizens in American history?  The world’s first highest performing superluminescent diode used in medical technology was invented by Haitian-American Gerald Alphonse, and Dr. Linda Marc-Clérismé, the daughter of Haitian immigrants, made it to Harvard and is now one of the world’s leading epidemiologists.

We wouldn’t be Dreaming of a White Christmas every year or enjoying an annual  Easter Parade or singing God Bless America had it not been for the son of poor Russian immigrants. We know him as Irving Berlin, who came from the poverty-stricken Russian shtetl of Tolochin.  He came with his parents when he was five years old and his only memory from his boyhood village was lying on a blanket by the side of a road, watching his house burn to the ground.

Nearly half of the fortune 500 companies were founded by immigrants or the children of immigrants, and nearly 60% of the top 35 fortune 500 companies were founded by immigrants or children of immigrants.

President Trump thinks we can cherry pick the immigrants who will be the most productive Americans. He’s pathetically wrong. America has done incredibly well welcoming millions of the world’s huddled masses, wretched refuse, and homeless, tempest-tossed immigrants to its shores.

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Barnum and Bannon’s 3-Ring Circus

Of Thee I Sing Heading AuthorsOkay, our headline is a play on words, but our government is rapidly devolving into a three-ring circus.

As Mark Twain reminded us over one hundred years ago, referring to the legislative branch of government, “no man’s life, liberty, or property are safe while the legislature is in session.”

The second ring, the Judiciary, is having a make-over as the Trump Administration, with surgical precision, assiduously remakes the face of the federal judiciary.

More on these two rings of this three-ring circus in a later essay. Right now, let’s focus on the center ring, under Washington’s Big Top (aka The White House).

It is, indeed, a circus—The Greatest Show on Earth, with high-wire artists balancing precariously overhead, twirling dervishes (spokespersons) in the briefing room, wild animals (clawing at one another) on pedestals here, flame swallowers there, and knife throwers, well, everywhere.

The thing is, it’s not entertaining—it’s not funny. Nor, we must observe, is all of the circus atmosphere and the discontinuity of our public life the ringmaster’s fault.

Donald Trump, like it or not, is the constitutionally elected President of the United States. Many politicians, media talking heads, and a plethora of highly opinionated bloviators on both the left and the right just can’t stand that reality. Their mission has become to bring him down, to nullify the last election. As the likelihood of finding evidence of illegal campaign collusion between Trump and the Kremlin fades, the President’s antagonists pin their hopes on some finding of wrongdoing, somewhere, sometime, something.

California billionaire Tom Steyer has committed to spending $20 million to promote an impeachment movement. Well, impeachment isn’t, or shouldn’t be, about movements. Impeachment should result from a finding by the House of Representatives of an offense such as “Treason, Bribery, or other (emphasis added) high Crimes and Misdemeanors,” as specified by our constitution. It is true that no one can say, with specificity, what was intended by misdemeanors, other than to say that the constitution clearly put it in the same league as “or other high crimes” with specific reference only to treason and bribery.”  But we digress.

The news of late has been dominated by Michael Wolff’s “Fire and Fury,” in which all manner of White House insiders are alleged to have referred to President Trump, at one time or another, as an idiot, a moron, dumb, and a variety of other damning descriptions, and Steve Bannon having referred to those  who met with Russian intermediaries to get dirt on Hillary (Donald Jr., Jared Kushner or Paul Manafort) as “treasonous,” which proves only that Steve Bannon has no idea what the definition of treason is.

While there are, apparently, somewhat inconsequential inaccuracies in Wolff’s book, we find little startling in what he writes. We don’t mean that these quotes from White House insiders aren’t damning; we just note that they are not really new. We’ve heard nearly all these alleged statements before in many newspaper stories and television commentaries, and we have no trouble believing that in the frustrating, three-ring circus and presidential twitter world that is The White House, such descriptions have been thrown around quite a lot and with ample pique, even if not with any technical accuracy.

Today, they are simply terms of derision. For the record, an “idiot” would be described (if used at all) technically, as a person having a mental age of less than three years old and an intelligence quotient under 25. A “moron” would be a person of borderline intelligence having an intelligence quotient of 50 to 69. They are meaningless, albeit derisive terms today, other than to denote frustrating, if not wrongheaded, behavior or decision making.

Michael Wolff’s book is, of course, sensational but neither surprising nor unprecedented in its descriptions of staff utterances with respect to this President.

So, 1600 Pennsylvania Avenue has become a laughing stock, or worse, a place over which we should shed tears. Sadly, it is the institution of the Oval Office that suffers the most.

While House Senior Advisor, Stephen Miller,  called the book “grotesque” and writer Michael Wolff “the garbage author of a garbage book.” Miller referred to Steve Bannon, Wolff’s primary source, as “angry and vindictive.”

CIA Director Mike Pompeo called Wolff’s description of Trump “ludicrous,” and UN Ambassador to the United Nations, Nickie Haley, said she meets with the President weekly and is in constant contact with White House staff and, she insisted, those around Trump respect their president.

As someone who, many years ago, spent many years in Washington, and attended briefings in the White House, in cabinet offices and on Capitol Hill, I think what we and the rest of the world are observing is sad and unprecedented. As President Trump likes to remind other nations, the world is watching.

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The Tax Bill and Extreme Hyperbole

Of Thee I Sing Heading AuthorsThe Republican and Democratic members of Congress have their marching orders from which there is to be no deviation. From the Republicans, we are told to hold on to our hats because the economy is about to take off as never before and every boat will rise and every family will get to keep more of what they earn. From the Democrats—Armageddon, an outright fleecing of the middle class by big fat corporate America.

Shame on both their Houses, but considerably more shame on the Democrats. Democratic Party discipline has been over-the-top impressive. Either call the Republican Tax Bill grand larceny committed against the middle class or forget any worthwhile committee assignment and maybe expect to be “primaried” next Fall.  The Democrats have been frantically trying to outdo one another lamenting the tax plague about to befall the middle class.  The left-leaning media have been singing from the same songbook.  We’ll see. It is a huge gamble. They are betting their noise will overshadow the increased money that will begin showing up in millions of middle-class paychecks in February.  We doubt the gamble will pay off. Once the hyperbole dies down, over 90% of middle-income taxpayers will see a significant bump in their take-home pay, averaging over $1,000.  We’ll be surprised if the negative poll numbers regarding the tax bill, which is really driven by the unremitting negative drum beat the Democrats are pounding out, will hold.

Now, the Republicans have done their share of hyperventilating as well. They have wagered, big time, on a dramatic goose to the economy as a result of a grand largess to the business sector. We would describe this as the world’s longest “Hail Mary” pass, but, perhaps, well worth the attempt. Past history, however, suggests caution in assuming how much of that corporate largess will actually filter through the economy, but we’ve never seen such a large potential infusion of tax-driven earnings before. Somewhere between $1 trillion and $4 trillion could come home from abroad because of the one-time deep “discount” in repatriation tax. Furthermore, the expensing of capital investments in the year investments are made will add billions to corporate earnings. And, finally, we have the reduction of Corporate tax rates (something Democrats have always supported until a guy named Trump actually did it) from 35% to 21 %.

Disingenuous leftist politicians and commentators who really know better, are all singing the same chorus. “No one pays the 35% corporate rate to begin with,” they tell us. Well, fair enough, but nearly all industries and most major companies pay a lot more than the new 21% corporate tax rate.  For example, the retail industry pays an effective rate of over 30%, Engineering and Construction nearly 30%, Automotive nearly 28%, manufacturing, and Metals over 26%, Chemicals nearly 26%, Technology over 25%, Pharmaceuticals nearly 25%, and Aerospace over 23%. Collectively, billions of dollars freed up for expansion and growth.

Many companies have made firm commitments regarding an immediate infusion of money into employee paychecks and/or bonuses. We suspect a good bit of arm-squeezing by the Administration, but who cares?

Already, AT&T has committed to paying a $1,000 bonus to over 200,000 non-management employees, and to begin a $1 billion capital investment program in the United States. Not to be outdone, Comcast immediately announced that it would match the AT&T bonus by extending the same amount to 100,000 of its non-management employees. The major banks including Fifth Third Bancorp and Wells Fargo have announced similar substantial pass-throughs to their employees. Boeing also announced that it was allocating $300 million to employee-related benefits (whatever that means).

Actually, we believe employees should derive financial reward primarily from the growth of the companies for which they work. The primary purpose of profit is (or should be) to fund growth, and when companies grow their employees should benefit accordingly. In fact, corporate growth is the best means of securing rising wages for corporate employees. Indeed, economic growth—strong national economic growth is the only elixir that really pulls workers out of stagnant income growth.  It is, when all is said and done, the real remedy for poverty.

The Republicans have risked inflating expectations, but nearly all tax-payers will get to keep more of what they earn, and that’s a good thing. Whether the large corporate tax breaks will filter down into the rest of the economy remains to be seen, but there is plenty of reason to assume a positive economic impact. The fact that individual benefits lapse at ten years, in order to keep within the arcane Senate rules of reconciliation, probably ensures that we’ll see new tax legislation a decade from now. Meanwhile, ten years of tax relief isn’t a bad thing.

We don’t expect the elimination of the Obamacare mandate to have the draconian impact on health care that many predict. The fact is that nearly everyone who was taxed or penalized under the Affordable Care Act were poor and those who could least afford to be penalized (or taxed). Notwithstanding the elimination of the mandate, an additional eight million people have just signed up for health insurance.

So, let’s all take a deep breath and hope the tax bill produces the economic benefits that its proponents expect.  And let’s be truly impatient and resentful of politicians and commentators who hope with all their heart that it fails.

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Final Tax Bill: Plenty That’s Good Despite Naysayers

Of Thee I Sing Heading AuthorsSo, according to Senate Minority Leader Chuck Schumer Under this bill, the working class, middle class, and upper middle class get skewered while the rich and wealthy corporations make out like bandits. It is just the opposite of what America needs, and Republicans will rue the day they pass this.”

His statement is, of course, patently absurd. Then again, many of his statements are. Actually, no one really gets “skewered” other than some high earners who live in high tax states. But then, again, Schumer has maintained party discipline so the mantra from Democrats has, for weeks, uniformly been “horrors!”  That is why the new tax bill has polled so poorly. No one, including us, knew what the final bill would look like so public opinion polls about the bill were, by and large, meaningless. “Windfall for the rich. Windfall for the rich.” has been a steady drumbeat so, the surprise of all surprises, polls have been less than enthusiastic.

Now let’s get serious.

The new tax bill may or may not turn out to be great (that will depend on how much its business-related provisions actually stimulate economic growth, which remains to be seen), but it is far from the horror show Schumer and his acolytes are screaming it is. The liberal Tax Policy Center acknowledges 93 percent of taxpayers will see a tax cut, while some would see no change in 2019.

The bill nearly doubles the standard deduction by raising the standard deduction for singles to $12,000 from $6,350 currently, and it raises it for married couples filing jointly to $24,000 from $12,700.  Significance? Plenty. About 70 percent of Americans fall into this category. A near doubling of that deduction to $12,000 for individuals, $18,000 for heads of household, and $24,000 for joint filers—combined with some more-generous tax brackets and rates—means less tax taken from most individuals’ and families’ paychecks, according to the non-partisan, Consumer Reports.

The child tax credit is doubled in the new tax bill to $2,000. Furthermore, $400 of the additional $1,000 is refundable (all of the existing $1,000 is currently refundable) so qualifying families who owe no taxes with their returns will receive a check euphemistically called a “refund” for $1,400.

While much has been made of the elimination of the Obamacare mandate, the little-reported secret about the mandate is that the penalty it imposes has been paid almost entirely by low-income individuals and families. Let us repeat that. It is the very low-income individuals who have chosen to skip the ACA mandated coverage and pay the penalty instead. Why? Because the penalty is somewhat less than the premium they would otherwise pay even with the subsidies that are provided. It wasn’t supposed to work that way. The initial assumption was that upwardly mobile, so-called millennials, would be taxed by the mandate to induce them to buy insurance so that coverage would be affordable (with subsidies) to lower income citizens. But it has been a preponderance of low-income earners who have skipped coverage and paid the penalty instead. It seems somewhat logical to us that those low-income families that have been buying insurance will maintain their coverage because they will still be eligible to access the same subsidies as before. That hasn’t changed in the new tax bill.

So, when there is a reduction in tax rates, do they disproportionately favor the wealthy?  Of course, they do. Here’s the rub. The top 20% of taxpayers pay 95% of all the individual taxes paid in the United States. It’s time Chuck Schumer and his minions stopped treating these Americans as pariahs.

According to the Cato Institute, the Senate tax bill cuts income taxes for people making $40,000 to $75,000 a year by about 37 percent. People making over $1 million see a tax reduction of 6 percent, and some will see significant increases in taxes, especially if they live in high-tax states such as California, New York or New Jersey.

So, why all the grumbling on the left? Well, truthfully, it will be justified if trillions of new dollars that rapidly accumulate in corporate accounts as a result of lower taxes and repatriation of corporate dollars held abroad have little or no effect on economic growth. This administration believes that a robust economy will create robust demand for labor and that robust demand for labor will drive up wages, and, thereby, drive up tax revenues. Similarly, corporate earnings should soar and corporate taxes revenues should increase accordingly.  Logically, that’s exactly what should happen.

If, however, the Trump Administration squanders economic growth and spends wildly as did the Reagan Administration a quarter century ago, then this entire tax venture may prove that Chuck Schumer was right after all. That, in our opinion, would be the result of spending policy rather than tax policy.

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Trump on Jerusalem: He Got It Right!

Of Thee I Sing Heading AuthorsNotwithstanding our considerable criticism of President Trump’s many and varied pronouncements, policies, tweets, and decrees, we think he got it right this time.

For seventy years the United Nations and the rest of the international community have considered Jerusalem (now, hold on to your hats) a corpus separatum (a separate body). With all due respect, we would suggest that this arcane and now meaningless designation, given the history of the region, has become an argumentum ad absurdum (when a belief leads to an obvious absurdity, then the belief is false).

Jerusalem is the seat of government of the State of Israel. That, by the way, is the only definition of a national capital. President Trump committed no calamity by stating the obvious. Jerusalem is where the Israeli Parliament (the Knesset) is located, as is Israel’s Supreme Court, the offices of its Prime Ministers and Presidents.  It is Israel’s seat of government—its capital.  It is where dozens of other countries’ Presidents and Prime Ministers have come to address the Israeli people.  It is where Egyptian President Anwar Sadat went to propose peace and where dozens of other heads of state have come to address the Israeli people, including three Presidents of the United States, and the Presidents of Turkey, India, Italy, Germany, the United Kingdom, the European Parliament, Canada, France, Poland, Kenya, Ukraine, Croatia, to name just some of the heads of state who have come to Jerusalem to address the Israeli government and the Jewish nation’s people.

Now, ironically, seventy years ago when the State of Israel was created by the United Nations, Israel accepted (somewhat reluctantly) the designation of Jerusalem as a so-called corpus separatum. The Arab States didn’t. The Arab states rejected everything the United Nations codified including the notion of Israel at all, or of Jerusalem as a corpus separatum, or, for that matter, as an international city.

Instead, the entirety of Israel’s Arab neighbors went to war to destroy the new state and undo what the UN had promulgated. With that fateful decision by Israel’s Arab neighbors, all bets were off including Israel’s acceptance of her capital as a corpus separatum. But fate or, as some believe, divine providence, didn’t smile on the Arab world’s attempt to crush the infant State. Instead, the infant State prevailed and in the intervening years has developed into an incredibly strong, democratic, vibrant and stable nation.

It is worth remembering, however, that when the Arab league captured the old Jewish Quarter of the Old City during the fighting in 1947, they systematically destroyed and looted everything Jewish including fifty-eight synagogues. The Jordanian commander is quoted reporting, “For the first time in 1,000 years not a single Jew remains in the Jewish Quarter. Not a single building remains intact. This makes the Jews’ return here impossible.” The Hurva Synagogue, originally built in 1701 (about the time William Penn gave Pennsylvania its first constitution), was blown up by the Jordanian Arab Legion. During the years of Jordanian rule from 1947 until the six-day-war when Israel freed the old Jewish Quarter, a third of the Jewish Quarter’s buildings were demolished. All but one of the Jewish houses of worship in the Old City were destroyed. The synagogues were razed or pillaged and stripped. It is reported that their interiors were used as hen-houses or stables. So much for the corpus separatum.

We have read and listened to various correspondents and talking heads refer to President Trump’s recognition of Jerusalem as the capital of Israel as another Trump blunder and as not being in America’s interest. Why is it not in America’s interest?  They say the decision will cause protests and bloodshed. Sadly, it already has. But it doesn’t take much at all to cause protest and bloodshed in this part of the world or wherever fanatics dwell. That is why, ten years ago, a benign cartoon in a Danish newspaper depicting the prophet Muhammad caused riots all over the world. More than 200 people died, and there were attacks on Danish and other European diplomatic missions. Churches and Christians were attacked, and a major international boycott was initiated. Danish Prime Minister Anders Fogh Rasmussen described the reaction to a newspaper’s cartoons as Denmark’s worst international relations incident since the Second World war.

We recognize that there are those public personalities and media representatives who will look at any pronouncement or decision made by President Trump as an opportunity to criticize him. That has become their mission. Lord knows we’ve done our share of criticizing. But those who are critical of Trump’s decision to recognize Jerusalem as Israel’s capital because of the likelihood of protest and violence or the alienation of some, if not most, Arab nations would have used that concern to justify rejecting Israel’s statehood in the first place.

President Harry Truman made the decision to recognize Israel seventy years ago in the face of total opposition by his own Arabist state department.  George Marshall, our Secretary of State at the time, and one of the most revered Americans in the world was strongly opposed to Truman’s decision to recognize Israel at all. He felt we couldn’t antagonize 120 million Arabs over recognition of a tiny Jewish state in the former British Mandate, which was the successor to 400 hundred years of Ottoman rule. In fact, Secretary Marshall resigned over it. But President Truman was a far greater thinker than people gave him credit for at the time. He saw a bigger picture and had a greater sense of destiny.

Truman was correct then, and Trump is correct now.

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What A Week!

Of Thee I Sing Heading AuthorsWe took a brief hiatus at Thanksgiving and a news explosion the size of the Lituya Bay Tsunami erupted while we were gone.

Where to begin?

The most important news would be the major tax legislation passed by both the House and the Senate, but the most scintillating would be Special Council Mueller’s dinging of former National Security Advisor Michael Flynn for lying during an interview with the FBI.

Never, ever, do that! Just ask Martha Stewart.

So, we’ll start with the Flynn imbroglio that has all the talking heads talking impeachment – a bit prematurely, we would suggest. Nonetheless, Mueller has what he needs to squeeze Flynn into singing falsetto.

While there were, reportedly, a number of more serious charges that could have been directed against Flynn relating to Flynn’s undisclosed work for a foreign government (Turkey), Mueller chose a relatively minor offense in return for Flynn’s agreement to cooperate in the investigation of other “senior” and “very senior” officials. Think former campaign advisor George Papadopoulos (“senior”), and think son-in-law Jared Kushner (“very senior”).

As usual, based on what is thus far known, the criminal idiocy appears to be the determination to cover up an offense rather than the offense itself. So far, the focus does not, at this time, seem to be on Trump campaign collusion with Russia designed to cripple the Clinton campaign, but rather collusion by the Trump campaign to tamp down Russian retaliatory reaction to President Obama’s sanctions against Russia. Specifically, the Trump campaign’s  “very senior” official (presumably Kushner) apparently directed Flynn to contact officials from foreign governments, including Russia, to feel them out on a UN Security Council resolution critical of Israeli settlements.

Because the Obama administration was still in office, this “very senior” official apparently wanted Russia to delay the vote or defeat the resolution. This would have been a violation of the arcane Logan Act which has never been used to prosecute anyone. The Logan Act prohibits private citizens from negotiating foreign policy with a foreign government. At the time, Kushner was still a private citizen. The “gotcha” here is probably lying about or trying to cover up, that such an entreaty was made by a “senior official” of the campaign, rather than a technical violation of the Logan Act itself.

Now, regarding the biggest tax overhaul in a generation.

We often quote the late Senator from New York, Daniel Patrick Moynihan. He was one of the wisest men in a chamber where wisdom is invariably in short supply.  Moynihan wisely counseled that transformative legislation should never be passed on a purely partisan basis because, when all is said and done, it seldom turns out well. So, let’s take a look at this sausage-making exercise. Dubbed the Tax Cut and Job Creation Act, the new House and Senate tax versions of the new tax legislation, which now await reconciliation between the two chambers, is the first major legislative accomplishment of the Trump Administration.

Senate rules both helped and hindered getting a satisfactory tax bill passed. First, how the rules helped. Generally, Senate rules require a supermajority, or 60%, to pass a resolution. There can be a one-time exception to the 60% rule in each term as long a new Act won’t increase the deficit over a predetermined amount within ten years. The Senate passed a budget that requires that any new tax bill not add more than $1.5 trillion to the deficit over the next ten years. That means some tax reform measures have sunset or phase-out provisions so that the deficit effect will not exceed the predetermined ceiling within ten years. In addition, a new tax law might also literally have provisions to raise revenue to offset the lost income from tax reductions. The new tax legislation just passed by the Senate does both. It includes both phase-out provisions and revenue generation provisions.

For example, the legislation makes tax-rate reductions permanent for businesses (a reduction from 35% to 20% for C-corporations {mostly large businesses} and a reduction to 25% for so-called pass-through or S-corporations {mostly small businesses}, the profits of which are currently taxed at personal income rates for the owners.) Needless to say, businesses like these provisions.

Another strong pro-business provision allows corporations that hold their profits abroad to repatriate those profits at a one-time tax of only 10% instead of 35%. That could draw anywhere from two to three trillion dollars back into the United States from abroad. The impact of such an infusion of dollars into the American economy could, the argument goes, stimulate enormous economic growth as those dollars find their way into circulation through higher wages, capital purchases or other investment. Even if the funds are used to buy back corporate stock, the money winds up in someone’s hands and, therefore,  would be available for further investment or for other consumer purchases.

Because most of the tax reductions for individuals in the new tax resolutions are subject to expiration, the new legislation is often referred to as a giveaway to the wealthy (business people) at the expense of the middle and lower economic classes.  There is some truth to this and some exaggeration as well.

One of the existing “tax provisions” the Senate tax bill eliminates is the Obamacare mandate. Repealing the mandate frees up more than $300 billion to help finance the proposed tax cuts. It also could result in millions of people losing their health insurance. Fortunately,     Senators Lamar Alexander and Patty Murray have introduced legislation modeled after proposals drafted by the Problem Solvers Caucus in the House, which would maintain insurance coverage for at least the next two years.

Another questionable provision taxes tuition waivers for graduate students as income, even though they receive no income. Now, we recognize that imputed income may be taxed, but taxing tuition graduate-school waivers which could run $20,000 or more as income is, in our opinion, a stupid thing to do. First, these graduate students almost assuredly can’t afford the tax, and taxing learning is something only unlearned people would do, which, come to think of it, probably explains the thinking (or lack thereof) that went into this provision.

The non-partisan Joint Committee on Taxation, however, estimates 80% of Americans earning $50,000 to $75,000 would get a sizable reduction in their taxes by 2019. Overall, about 62% would pay less in taxes in 2019. A bugaboo, however, is that the Senate bill has the lower rates for individuals disappearing after 2025, assuming there is no new tax legislation introduced by that time. Republicans, of course, argue a future Congress is almost certain to extend the cuts. Also, there would be a reduction in refundable tax credits, a mechanism in which payments are made to those who don’t earn enough to pay any taxes at all.

Republicans also believe the tax bill provisions (especially the corporate tax cuts and the repatriation of corporate dollars held abroad) will promote so much economic growth that all costs will be offset by new revenue. How much new revenue? It’s next to impossible to accurately estimate how to “dynamically score” the legislation to account for increased economic activity that hasn’t occurred yet. Therefore,  most estimates of economic impact are predicated on static scoring which makes few assumptions about economic growth stimulated by the money the new legislation leaves in the economy or attracts to the economy.

And of course, Americans who own stock, either directly or through their pension funds have, for the time being anyway, enjoyed an incredible windfall as the stock market surges to new highs week after week.

In any event, the new tax legislation is clearly historic and will influence how history looks at the Trump years.

On other matters, we’ve given up tallying the titans in business and government who have fallen as their unwanted sexual predations have caught up with them. Similarly, President Trump’s tweet storms are just as unwarranted and just as hard to keep up with. Suffice to say, our President enjoys cutting adversaries down to size with his tweets and outbursts. Sadly, he fails to recognize that it’s the office he’s cutting down as well.

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Willful Ignorance: The New Plague

Of Thee I Sing Heading AuthorsAnd it might be just as deadly.

Last January we penned an essay, “The Death of Truth.”  It began, “We have a very serious and destructive problem in America. Yes, we know, we have many.  But this one is different because it is widely tolerated and, sadly, carefully nurtured by our nation’s leadership regardless of party. Truth has become one of the lowest coins in the realm.  The narrative, carefully conceived, studiously nurtured, and determinedly communicated has, it seems, become the highest coin of the realm.”

Today, we believe the problem is even worse. That’s because we have become willfully ignorant. Too many of us have abandoned truth as our bedrock value, and, instead, embraced any narrative that best suits our beliefs, biases and comfort levels. It is a dangerous place to be. It is a realm where mischief and demagoguery thrive, and where altruism and good citizenship go to die.

This realm is not home to any particular party in America. Politicians, both Democrat and Republican have, do and will continue to focus herculean effort on constructing narratives that are seductive rather than truthful—not so much to fool people, but rather, to provide people versions of reality that they most want to see, hear or read.  Sadly, far too many of us largely, and willingly, seem to prefer seduction to candor. To be fooled is bad enough.  To seek to be fooled is far worse.  Today, many people turn the dial (okay, press the button) to find “news” that comports with their preferred version of reality rather than the hard, solid, truth.

President Trump defines truth as being that version of events that best satisfies his needs or objectives, or salves his sense of self. Hence his inaugural crowds were the largest ever, and he would have won the popular vote but for the three million illegals who voted for Hillary Clinton. Both ridiculous assertions. President Trump simply says what serves his interest with complete abandon. For example, he blithely stated that his budget plan would offer “one of the largest increases in national defense spending in American history.” But in fact, Congress raised defense budgets by larger percentages than the 10 percent increase that Trump proposed three times since 2000. The base defense budget grew by 14.3 percent, in 2002; by 11.3 percent, in 2003, and by 10.9 percent, in 2008.

Trump bragged that since his election, “Ford, Fiat-Chrysler, General Motors, Sprint, Softbank, Lockheed, Intel, Walmart and many others have announced that they will invest billions of dollars in the United States and will create tens of thousands of new American jobs.”

Why President Trump chooses to misrepresent facts that are so easily checked is beyond us. Many of these announcements reflect corporate decisions that predate Trump’s presidential election, making it unlikely that his administration had much, if anything, to do with these corporate decisions. In the case of Intel, construction of the Chandler, Arizona, factory referred to by Trump actually began during Barack Obama‘s presidency.

Then we have the consequences of years of demographic change in America. Candidate Trump, sensing palpable xenophobic stress in the country, milked that unease for everything it was worth during the presidential election. He threatened to deport millions of undocumented men, women, and children who were here largely because we, as a nation, looked the other way when we needed their labor.

Lest anyone misinterpret our essay this week as an anti-trump screed, it is not. We do not believe the precipitous diminution of truth in American politics began when Donald Trump decided to march to the oval office by turning the 2016 Presidential election into a reality tv extravaganza.

After all, President Barrack Obama knowingly assured the nation that under his healthcare program, (1) premium costs would decline $2400 by the end of his first term, (2) that everyone who wanted to keep his or her doctor could, (3) everyone who liked his or her plan could keep it, and (4) that he would veto the Affordable Care Act if it increased the deficit by one dime. To which, for emphasis, he added “period!” It wasn’t true.  It was never true, and the President knew it wasn’t true.

Remember when one of the key architects of the federal healthcare law, MIT Professor Jonathan Gruber told a panel that a “lack of transparency” and the “stupidity of the American voter” were essential in getting Congress to approve Obamacare. “Lack of transparency, he said, “is a huge political advantage,” Gruber continued, “And basically, call it the stupidity of the American voter or whatever, but basically that was really, really critical for the thing to pass.” He said that voters would have rejected Obamacare if the penalties for going without health insurance (the so-called mandate) were interpreted as taxes, either by budget analysts or the public. “If CBO scored the individual mandate as taxes, the bill dies,” Gruber said. “If you had a law that made it explicit that healthy people are going to pay in and sick people are going to get subsidies, it would not have passed.

What we find most disturbing, isn’t that Presidents are prone to exaggerate or even lie. What is disturbing, if not terrifying, is that most people don’t seem to care anymore.  The impact of this reality is that truth is greatly devalued and deceit pays a far higher dividend.

We are living in a strange and troubling time. Politicians have always been willing to stretch the truth as long as they believed they could get away with it. Being caught in a deliberate, out-and-out lie, however, was once a deal breaker for most voters. Not anymore. If the lie comports with what one wants to hear, then it seems to have become de rigueur in American politics.

So, the reader might ask if we are being alarmist when we write of willful ignorance and describing it as a plague on the American body politic. We are not establishing a moral equivalency between lies that are self-serving and lies that are deemed to be for the public good. We are, however, sounding an alarm that widespread acceptance of lies, defamations, and misrepresentations simply because they comport with our sense of right or our sense of comfort, even when we know they are untrue, is a step back into very dark history.

Tellingly, a few days after the last election, the Oxford Dictionaries announced that “post-truth” had been chosen as the 2016 word of the year. — A strange and troubling time indeed.

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Ideas and commentary with allegiance to neither the left nor the right, but only to this sweet land of liberty.