HEIDI FISKE | Is Trump Seeking War?

John R. Bolton, President Trump's
National Security Advisor-Designate

(The following Guest Post was written by Heidi Fiske:)

Pundits right and left fear that John Bolton as National Security Advisor could cause us to stumble into war.

But what if it isn’t stumbling? What if Trump is actively seeking to take us into war?

There are three reasons why this is possible, if not likely. I number them below.

But let’s begin with the background. Before the Bolton appointment, Trump had been priming the war pump in several ways.

First, 60 percent of the top diplomats in the State Department left under Secretary Rex Tillerson, reducing our ability to negotiate, or gain support from allies. To this day there is no ambassador to South Korea. The top U.S. official there, since January 2017, is chargé d’affaires Mark Knapper.

Next, Trump fired Tillerson, who urged keeping the Iran nuclear deal in place and who advocated talking with North Korea, to be replaced by Mike Pompeo. As head of the CIA, Pompeo was the only Trump cabinet member to argue for decertifying the Iran nuclear deal. Not only could that in itself lead to war, but it should make North Korea discount any promise Trump might make in talks with Kim.

Finally, the cherry on the top, is Bolton. He has argued for a pre-emptive strike against North Korea (“The legal case for striking North Korea first,” The Wall Street Journal, February 28, 2018); bombing Iran (“To stop Iran’s bomb, bomb Iran,” The New York Times, March 26, 2015), and to this day he supports our having started the Iraq War, which many others regard as the greatest strategic mistake in our recent history. Bolton will start his new job just as the final jockeying about conditions for the Trump/Kim talks are being worked out – talks whose only purpose, he has said, is to prove that talks don’t work, thus clearing the way for military action. He will also start just about the same time as the Iran nuclear deal needs to be recertified on May 12.

Could his new personnel choices herald that Trump is actively seeking to go to war? Consider these three things:

1. Trump’s tactic throughout his campaign and Presidency has been to drive unpleasant news off the front pages by creating a new ruckus. When he was taking heat over his stance on the healthcare bill and response to the hurricanes, for instance, he started the stink over football players kneeling during the national anthem. Now multiple amatory scandals, and the Mueller investigation, dominate the news. Very few things could top these in importance or reader appeal. War, however, could drive both off the front pages.
2. Trump has good reason to think he’s Teflon. The tax legislation, tariffs, and removal of financial protections could all hurt him with his base – but they haven’t much yet. While an exhaustive January poll by Morning Consult found his approval down among all voting blocs, his support is still well over 40 percent among whites, military personnel and households, private sector workers, all Christians, southerners, retirees, those earning over $50,000, men, all adults, and well over 70 percent among Republicans as a whole, and Republican men and women separately. And his approval is still 87 percent among those who voted for him in 2016.
3. Trump surely remembers the record of another ever-less-popular President, George W. Bush. In May 2004, during the runup to his re-election, a CBS News poll found that Bush’s negative rating was 65 percent, and that, from January 2004, “majorities of the public have consistently said the U.S. is off on the wrong track.” Yet he was re-elected: Why? Here is a stunning statistic: No wartime President has ever failed to win re-election.

So let’s suppose for a moment that Trump wants to go to war. What’s to stop him? Congress, you might think. Not so fast: The 1973 War Powers Resolution gives the President 60 days to deploy troops before war must be declared by Congress. And obviously after those 60 days we could be in such a morass that there would be no turning back.

Anything else? Two other possible events might dial back the White House Bellicosity Meter:
Bolton doesn't need Senate approval, but he might not get a security clearance before he is scheduled to start work in April.

Pompeo might not be confirmed by the Senate – highly unlikely, while the President retains high ratings with his base. And who knows whom Trump would nominate next?

Thus this observer concludes that there is at least a 50-50 chance that we are on our way to a new war, or wars. The President’s personnel choices are not the cause. They are more likely the result of his desire for war.

JOBS | Suffolk County, NY

How is Trump doing?

In 2010, Randy Altschuler attacked the incumbent congressman from Suffolk County, NY, Rep. Tim Bishop, for not doing enough for the Long Island economy.

He said that 30,000 jobs had left Long Island during Bishop's incumbency. I pointed out in an article on Huffington Post that the number was a lie. The correct figure was a gain of 36,000 jobs. Altschuler stopped using the number, but not until after he sent a glossy card to every voter with the lie plastered all over it.

Lee Zeldin was next to campaign against Bishop, in 2008. He lost badly in a Republican-leaning district. But in 2014 he adopted a straight Tea Party program, one of the first campaigners to do this. Here were his four main programs:

1. Oppose raising the Federal minimum wage.
2. Curtail Medicaid benefits. 
3. Simplify the Federal tax code and cut taxes on the rich. 
4. Cut Federal spending.

Zeldin was one of the first of the Tea Party electeds, in 2014. The GOP gained a majority in both the House and Senate in the 114th Congress, 2015-16. So how have Zeldin and the GOP Congress been helping Suffolk County? Let's ignore the first year, during which Zeldin was finding out where the bathrooms are in the maze of Capitol offices. Few Members of Congress make a dent in Washington in their first year (one reason for respecting seniority). Let's look at the second year of his term of office. How has the Suffolk County economy performed in 2016?

County-level numbers for jobs and wages are released quarterly and the numbers for the fourth quarter of 2016 were just released by the BLS on Wednesday. Here is the story for Suffolk:

Jobs. Suffolk's nonfarm payroll jobs rose to 661,400 in the fourth quarter of 2016, an increase of 900 jobs.

That's fewer than 1,000 jobs, compared with Bishop's presiding over growth of   36,000 jobs when he was attacked by the GOP for not doing enough for the economy.

The tiny growth rate during 2016 ranks 205th of 345 large counties for which the BLS computes this information, about 60 percent down the list. Within New York State, the growth rate is in the bottom half of the 18 large counties on the BLS list.

Wages. But maybe, has the quality of the jobs improved under Zeldin? What has happened to weekly wages? The news is much worse. Wages in Suffolk County declined by 3.5 percent, placing the county 289th out of 345 large U.S. counties, i.e., in the bottom fifth. Only two counties out of the 18 in New York State did worse.

This is not a good record. Since November 2016 the GOP has not only Congress but the White House, and a president who promised more jobs. We are waiting and watching.

JOBS | Two Job Numbers for Trump to Beat (Updated Jan. 6, 2017)

Trump visits Obama at the White House. 

It is understood among the cognoscenti that the Democrats managed the economy better for most Americans than the Republicans in the new millennium.

The problem for the Democrats in the 2016 election was voters who switched parties between 2012 and 2016. They were predominantly non-college-educated, from the least-well-educated states.

They picked up on the plain-language appeals and promises of candidate Donald Trump. The Democratic arguments were pitched to their college-educated base.

Perhaps the Democratic appeal to voters should have been based on a smaller number of performance indicators. President-elect Trump has promised to increase jobs. Two broad indicators–as opposed to anecdotal evidence from individual companies–might suffice to measure the success of his administration.

We can even use the BLS November job numbers [Jan. 6, 2017: see below for update, which changes little] for clear and independent benchmarks against which the economic performance of our presidents can properly be measured. The final report on the Obama Administration will be issued on January 6, subject to revision, but the December numbers, based on November reporting (and prior months for their seasonal adjustment), are not likely to change much from November.

Two Key Indicators

Here are the two key long-term numbers against which Obama's economy can be compared with the Bush economy of eight years ago and the Trump economy of two and four years hence:

1. Unemployment =  a rate of 4.6 percent in November

This is arrived at by dividing the number of unemployed, 7.4 million in November, of whom 1.9 million have been unemployed for 27 or more weeks, by the labor force (employed + unemployed), 159.5 million.

This compares with 7.3 percent in December 2004, the last month of the George W. Bush administration. (The numbers are easily found by punching into Google the two words  Unemployment and FRED. This will take you to the super-user-friendly St. Louis Fed database, God bless them.) That is a reduction of 2.7 percentage points. This compares with an increase of 3.4 percentage points during the Bush 43 administration and a decrease of 3.5 percent during the Clinton administration:

• Clinton vs. Bush 43: Better by 3.5 - (-3.4) = 6.9 percentage points.
• Obama vs. Bush 43: Better by 2.7 - (-3.4) = 6.1 percentage points.

2. Employment-population ratio = a rate of 59.7 percent in November.

This number is arrived at by dividing the number of civilian noninstitutional employed, 152.1 million, by the civilian noninstitutional population, 254.5 million.

This number is solid for long-term comparisons because it is not affected by answers to the unemployment survey. The labor force participation rate is dependent on the unemployment rate in the definition of the labor force. The employment-population ratio is not affected by any long-term change in the definitions of the unemployed or in the conduct of the monthly surveys of the labor force.

In December 1992 when President Clinton came to office, the employment-population rate had been falling and was at 61.4 percent. It rose during his administration to 64.3 percent, an increase of 2.9 percentage points. Under G. W. Bush, the rate fell by 3.3 percentage points to 61.0 percent. Under Obama the rate fell further to 59.7 percent, a drop of 1.3 percentage points. So here is the record of this measure:

• Clinton vs. Bush 43: Better by [2.9 - (-3.3)] = 6.2 percentage points.
• Obama vs. Bush 43: Better by [3.3 - 1.3] = 2.0 percentage points.

On both measures, the last two Democratic administrations outperformed the Bush 43 administration, by a lot.

Update, Jan. 6, 2017

Here are the final numbers for November, which arguably should still be the baseline, seasonally adjusted, if the incoming President wants to take credit for changed expectations in December (or his opponents do). Here also are the December seasonally adjusted numbers. Either way, from here on, it is President Donald Trump's baby–TrumpCare, TrumpEconomy and all.

Obama Fundraising a First, Says Election Commission Chairman

Thanks to Congressional Quarterly for noting today ("Obama’s Operation May Become the Model of Fundraising") the comments of former Federal Election Commission Chairman Bradley A. Smith in a Washington Post op-ed piece a week before the election.

Brad Smith was commenting on the fact that the campaigns of both Barack Obama and John McCain had exceeded $800 million in combined spending two weeks before Election Day. The CQ story emphasizes that "It’s not just the amount of money that was spent but also the way it was raised — much of it online, in small chunks and, in Obama’s case, completely independent of the public financing system for the first time in the post-Watergate era."

Smith, in his op-ed, says: "I’ve studied all the great fundraisers of the past, from William McKinley to Richard Nixon to George W. Bush. American politics has never seen anything remotely like this before.”

Smith is overtly partisan - he was a Republican appointee. The online discussion of Obama's citizen "juggernaut" is all the more interesting. He thinks the system has worked, even though his candidate was losing. Here are some excerpts.

Arlington, Va.: Just to counter some of the paranoid posts -- I'm one of those small donors that you fear so much. In <> early September I became so disgusted with the McCain/Palin campaign that I went to Obama's Web site and made a donation. I since have made two additional donations. All three were responses to something that was said by the McCain/Palin campaign. In all I've given less than $100. I was born in the U.S. and have lived here all my life, and despite various Republican's claims I'm not a communist or anti-American. I'm just a regular person who has every right to vote and to support a candidate with my time and money.

Bradley A. Smith: I wish more people thought like you -- not your support for Obama ;-), but regarding your motives for supporting Obama and your willingness to back up your beliefs.

_______________________

Reston, Va.: McCain keeps saying that Obama is trying to buy the election. Isn't it more like the citizens are? They're the ones contributing the money.

Bradley A. Smith: Right on!

_______________________

Wilmington, N.C.: "Former FEC chairman." Given your obvious political leanings, I must say I find that very disturbing. Is that a partisan political post? Should it be?

Bradley A. Smith: The FEC has six commissioners, with no more than three from any one political party. Four votes are needed for most action. So one party can't dictate outcomes. I found that the Commission worked pretty well. But you've really hit the nail on the head -- how can you maintain over time a truly unbiased political police? That's why I generally would deregulate the system, or at least start in that direction. We need separation of campaigns and state, you might say.

_______________________

Maryland: The other day a friend and I were having a friendly argument. He was saying there should be more rules to limit how much a campaign can spend because $200 million is outrageous. I said "$200 million is rock-bottom cheap for a good presidential administration!" It's just a fifth of a billion dollars -- compare that to the cost of the Iraq war. Just saying.

Bradley A. Smith: You are right. Political spending needs to be kept in perspective. Americans will spend about $12 billion on potato chips this cycle. Coca-Cola will spend more on advertising this year than will be spent by all the candidates who have run for president combined. Auto makers will spend more than twice as much this year advertising cars as all political spending for federal office. It cost money to communicate, whether you are talking about cars, cola or politicians.

Poll: McCain Is Losing Because of the Economy

2 a.m. EST: An AOL poll shows a majority of more than 200,000 respondents saying that John McCain can still win on November 4, eight days from now. The poll asks: "What should a McCain comeback strategy focus on most?" Of the 160,000 respondents, 54 percent believe that he should focus on economic solutions. Only 20 percent say McCain should focus on his experience, only 18 percent say he can succeed by attacking Obama. (Only 8 percent say there is some other formula for a McCain victory.)

Comment: As forecasts of a deep global recession grow and some sober economists (like Harvard Professor Greg Mankiw in Saturday's But Have We Learned Enough?) say an economic downturn rivaling the Great Depression can't be ruled out. McCain needed to position himself as a leader offering different economic solutions from the Bush Administration. The AOL poll suggests that McCain's inability to cobble together such a plan is Obama's greatest strength. If he is so experienced, the electorate seems to be asking, why isn't McCain able to explain what he would do differently from George W. Bush about the economy?

6 a.m. EST: More than 183,000 responses. Economic solutions, 54 percent. McCain's experience, 19 percent. Attacking Obama, 18 percent. Other, 9 percent.

Can a President Affect the Business Cycle? Yes.

The excellent graphic in the New York Times yesterday asked: "Can a President Tame the Business Cycle?" Provocative. Draws attention to the graphic. But it's like asking "Can a President End Poverty?" Unfair. Invites a shrug of the shoulders.

The text accompanying the chart - which depicts the consequences of the economic policies of rec ent presidents - asks a more reasonable question:

Today, Americans save less and earn a lower minimum wage — in real, or inflation-adjusted, terms — than at nearly any other time since 1950. Can voters reasonably expect these and other indicators to change significantly after a new president takes office in January?

But the appropriate question is not whether one can always “tame” a tiger. It is whether we have to feed people to it.

Voters reasonably can expect better policies than the disastrous laisser-faire policies of the last eight years.

By ignoring the unsustainable runup in asset values (especially housing values) that occurred under George W. Bush, recent policies have invited the collapse of these values in recent weeks. In Keynesian terms, Dubya had the furnace running during the month of August. Allowing and encouraging the extreme increase creates the probability of an extreme correction. Dubya is responsible for the economic hardships and inefficiencies that accompany the correction.

Starting in January under President Obama one can expect a move toward less inequality of income and a less extreme business cycle.

Misery Index Climbs

Wall Street indexes rise and fall but the economic misery index goes on forever as a single-number summary of what is happening on Main Street. I therefore think it is well worth watching as a measure of how the economy is doing. The index (simply the sum of unemployment and inflation rates) rose in June to 10.5, the highest level in 15 years, i.e., since January 1993, the month President Bill Clinton was inaugurated and President G.H.W. Bush left office. Under Clinton the index improved but it has recently climbed back to what it was when he took over.

Misery Index in the Last Month in Office of Recent Presidents:
Carter: 19.3
Reagan: 10.1
Bush 41: 10.6
Clinton: 7.9
Bush 43 (as of June 2008): 10.5

More (Huffington Post)

More on U.S. Debt

In two previous blogs I have presented U.S. national debt data showing that it is high and growing relative to other countries. In The Growing Price of U.S. Debt, I estimated the debt at $67,000 per U.S. taxpayer, with the number about six times bigger if we add unreported U.S. liabilities. In The U.S. 10-Trillion-Dollar Debt Limit I noted that the debt limit has been raised an average of $500 billion per year since President George W. Bush came to office and noted that our state and local officials don't have the luxury of running deficits. NYC Mayor Bloomberg has assailed the continuing huge U.S. budget deficits as "lunacy" in a speech to British conservatives.

My concerns focus on the fact that the debt is (1) growing fast, (2) understated, because it does not include social insurance liabilities, and (3) leaves a legacy for our children of a burden of taxes (especially, as the U.S. tax system is now structured, payroll and income taxes) that will reduce their standard of living. The other concern I have is that continuing current-account deficits mean that the debt is being financed by overseas accumulations that could be de-accumulated under conditions that will tie the hands of the United States internationally.

Now I would like to add to the pile of evidence against current practice an interesting summary of the growth of the U.S. national debt since 1938 by Steve McGourty, who takes a partisan approach - he lays the blame for the bulk of the growth of the debt at the feet of tax-cutting Republican Presidents Reagan and George W. Bush. Actual reductions in the national debt occurred in the last 50 years only under under Presidents Kennedy and Clinton (adjusted for inflation). His charts are interesting. I would be interested in seeing (1) his numbers adjusted for inflation, (2) an addition for unfunded health and Social Security liabilities, and (3) a link between the current-account deficits and the budget deficits.