Wednesday, March 28, 2018

Why Did Evangelicals Vote For President Trump in 2016?

(first published in North State Journal 3/28/18)

Michael Gerson wrote ‘The Last Temptation’ in The Atlantic recently where he struggled to understand why, and how, evangelicals in America supported Donald Trump in the last election and have stood by him despite his flaws in moral judgment and character.

Political cognoscenti and #NeverTrumpers such as Mr. Gerson who grew up in the ‘values-based’ campaigns of the 1980s worry that the Trump Administration is ‘the beginning of the end for the American Republic’ or perhaps plain and simply ‘The End’ of all things sacred in American politics.

They fail to understand this simple premise: ‘Why would anyone want to vote for a candidate who will not support policies to make their lives better?’

American presidential campaigns are not about selecting the ‘nicest’ or ‘most moral’ person to occupy the White House and make the most important decisions in the world on a daily basis. It would be nice if they were, but history has shown they were mostly not.

American voters, be they Christian or not, want the following things in order:

  • A Job
  • A Good Job
  • A Better Paying Job
  • A Way to Support Themselves and Their Families 
  • Protection against crooks and criminals in the streets where they live
  • Defense against foreign invaders and attacks.
  • Freedom from being told what to do and how to think all the time by elected politicians
  • And then everything else comes in at about Priority #50 by comparison

Evangelicals, along with tens of millions of other citizens, did not see any appreciable wage gains adjusted for inflation under Bush 43 and certainly not under Obama for 16 long years.

They saw the US attacked on our soil for the first time since Pearl Harbor on 9/11. They saw the greatest economic crash since 1929 and the resulting Great Recession that ranked just behind the Great Depression 80 years previous.

They did not see any incumbent elected politician doing anything that helped them out personally in a major way. So they took a chance on the ultimate outsider and rolled the dice hoping he would shake things up in Washington, DC so they could find a good job or keep the one they had.

Being a ‘moral’ or ‘religious’ person is no guarantee of being an effective President. Jimmy Carter may have been a great Sunday School teacher but he was one of the worst decision-makers and leaders in White House history.

The dumbest thing a person can do is vote for someone who does not help them improve their station in life. What possible good would it do to vote for anyone who does not help them live better, more free and prosperous lives? Why would anyone intentionally vote for a candidate or party that passes legislation which leads to a lower standard of living and income for them and their families?

No one wants to elect someone who makes their lives more miserable. No sane person at least.

Political consultants always tell their candidates the same thing: 'This campaign is about JOBS, JOBS, JOBS!'

That is what fueled the evangelical support for Trump that is still strong. They now see their pay checks going up due to the tax cuts and the better economy; they see more job opportunities for themselves and their children and friends and they feel safe when Trump talks tough in his Queens way of talking to our adversaries overseas.

Just as other religious and non-religious people who voted for Trump across the board even though many held their nose doing it while thinking: 'Well at least he ain't Hillary!'

Politics is not about a candidate’s personal religious belief, manners or character as Michael Gerson and others want to believe. Politics is about citizens electing representatives who will get things done that help them lead better lives for themselves first and everyone else as well.

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Tuesday, March 20, 2018

"Enforcement of Trade Agreements' or 'Trade Wars'?

(first published in North State Journal 3/21/18)

President Trump’s announcement of tariffs on steel and aluminum set off a spate of comments comparing his actions to the Hawley-Smoot tariff act that many feel precipitated and certainly exacerbated the Great Depression of the 1930s.

Is he starting a ‘trade war’ for no good reason at all? Or is he positioning the US for a much-needed review and rewrite of NAFTA and other bilateral and multilateral trade agreements?

The history of American trade policy has not evolved much since the end of World War II. After the war, the highest priority was placed on establishing GATT (General Agreement on Tariffs and Trade) with devastated countries such as West Germany and Japan to help them develop free market economies that would support freedom and democracy.

Making trade concessions to help export freedom and democracy was far more preferable than fighting another world war against them, this time with nuclear weapons.

GATT morphed into the World Trade Organization (WTO) in 1995 which became the forum to govern international ‘free trade agreements’.  The WTO is currently the only mechanism we have to monitor trade between the US and Japan, the EU and China.

One of the industries that became a sacrificial lamb for trade agreements, sadly for North Carolina, was the textile industry. Textile manufacturing was labor-intensive and required relatively low working skills which was perfectly suited for workers in developing countries such as China and then southeast Asia.

As time went on, successive Administrations and State Departments continued to make trade concessions to help nations develop and create jobs primarily as a foreign policy tool, not as an economic tool to defend and protect American jobs.

The only problem is that China has failed to convert to democracy after all these years. And they are clearly taking advantage of our lax enforcement of existing agreements to become the second largest economic power in the world.

Now should be the time to stop using trade as a foreign policy tool and revert to rewriting trade agreements solely on economic fairness and equity grounds to all parties.

Most trade agreements have provisions that call for ‘countervailing tariffs’ in the event a country subsidizes manufacturing, manipulates currency or steals intellectual property rights that lead to a surge of exports to the US. The US, at the behest of the State Department, has routinely turned a blind eye to such grievances and allowed cheaper imports to flood into the States.

After all, who doesn’t want to buy a dozen T-shirts for $10 from Wal-Mart?

In Senator Elizabeth Dole’s office starting January 2, 2003, we sent weekly textile job loss reports to the Vice-President’s office. By August, the total was 52,000 and we were begging the Bush 43 Administration to invoke the surge protections, or countervailing tariffs, already existing in the textile agreements.

In August of that year, Pillowtex in Kannapolis announced it was laying off 7000 people.

‘What is going on with the NC textile industry?’ asked the Vice-President’s office. After close to 60,000 jobs had been lost to unfair textile importation in 8 months.

President Bush signed an executive order raising tariffs on 3 categories of lingerie from China but by then, the damage was done and the response was too little, too late.

Enforcing trade agreements has been the US problem for decades. It is not a ‘trade war’ to demand our economic allies and partners abide by the rules of fair but free trade and not take advantage of US workers.

Perhaps President Trump is opening a gambit to force trading partners back to the table to get more favorable treatment for American workers and force China, among others, to play fair.

That is not a ‘trade war’. That is ‘insisting on fair play’, ‘demanding enforcement of trade agreements’ and ‘negotiating to win’.

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Wednesday, March 14, 2018

'We Will Have 5% GDP Growth Again In America!'

'Morning in America--Part 2', 2017-2018
(first published in North State Journal 3/14/18)

The great thing about making predictions is that people only remember when it is correct and the vast number of prognosticators were wrong.

Unless the prediction is so out-of-bounds proven wrong that it is never forgotten as one of the greatest bone-headed predictions ever.

Such as when Nobel Prize-winning economics professor Paul Krugman on Election Night, 2016 said: ‘If the question is when markets will recover, a first-pass answer is 'never'".


Economists get ridiculed, deservedly so, for breathlessly predicting '10 of the last 3 recessions!' However, in 2008, before the greatest Crash since the 1930s, hardly any economist was sounding any alarm bells.  Many were caught on tape saying how great everything seemed at the time and smooth sailing was ahead for the American economy ‘for the foreseeable future’.

Ouch again.

One private economic guru has made the following argument against the backdrop of an army of professional economic forecasts predicting an average of 2.5% quarterly and annual GDP growth for the next 3-5 years:

'We will see economic growth rates well in excess of 3% on a quarterly and yearly basis for the foreseeable future!'

His reasons for the extra economic growth are as follows:

  1. Lowering corporate tax rates to 21% down from 35% will raise retained earnings (profits) in American businesses by $2 trillion over the next 10 years according to former Reagan economic advisor Martin Feldstein, now at Harvard.
  2. Adding to that pool of available cash to invest is the immediate expensing of capital equipment in the first year versus depreciating such assets over 3, 5, 7 or 10 years. Depreciation is a complicated concept for non-accounting types but pairing off the cost of buying modern new equipment against current year revenues in 1 year is far better than spreading it out over a number of years.
  3. Cash kept in year one will be much larger due to the tax protection offered by immediate expensing even though new, more efficient machines will be financed over a number of years.
  4. Under old depreciation rules, companies had to account for future tax payments on their balance sheets for several years. With immediate expensing of new equipment, their deferred tax liability goes way down which means they can borrow more money to buy more modern equipment to replace more old inefficient broken-down equipment.
  5. Productivity rates go up across every industry sector that buys new equipment. When productivity goes up, wages go up; people take home more money in real wage growth on top of the $1000-$2000 tax cuts that are perennial in effect now and a vicious cycle starts to feed on itself upwards in a positive manner.
  6. The lower 21% tax rate will repatriate, or bring back, to the US $2-3 trillion in corporate profits corporations have held in Europe for a long time instead of being taxed at the previous high 35% rate.
  7. Large subchapter S corporations will convert to C corporations to take advantage of the new lower corporate tax rate.
  8. Wage growth should exceed 3% later in 2018 when these changes work their way through the economy.
  9. We should see slightly higher rates of inflation but that is a good sign after close to a decade of near zero inflation which reflected the relatively dormant state of the economy from 2008 to 2017.
  10. The capital expenditures of the corporate sector will supercharge companies that build plants and equipment.
'We may see several quarters where economic growth exceeds 5%’ says this expert.

If he is ‘wrong’ and it is ‘only’ 4%, that is far better than any growth rate we have seen since 2000. Young people may finally see what a booming economy looks and feels like.

To their benefit.

Wednesday, March 7, 2018

'The Best Welfare Program Is A Job'

(first published in North State Journal 3/7/18)

The difference between liberal and conservative ideology can best be seen when confronted with numbers such as the following from a recent Joint Legislative Committee hearing in the North Carolina state legislature on Medicaid enrollment:

  • 29 counties in North Carolina have experienced a decline in non-Family Planning enrollment for Medicaid since 6/30/16
  • Another 33 counties have experienced a decline in enrollment since 6/30/17
  • Over 60% of the counties are experiencing non-Family Planning enrollment declines in FY 2017-18 

To what specific factors can these declines be attributed?

Republicans tend to point to the improving economy and lower unemployment rates for much of the declines in Medicaid enrollment across the state. People who get jobs that provide health care coverage typically go off Medicaid eligibility and on to private plans.

The average stay on Medicaid for non-long-term disabled citizens is about 10 months contrary to public opinion where many assume once a person goes on Medicaid, they are there for life.

Democrats tend to focus on other reasons such as availability of information to people eligible for Medicaid but do not know how to enroll; possible flaws in collection of statistical data and fear by illegal aliens living in North Carolina to apply for Medicaid benefits and risk possible deportation.

All play into possible explanations.

What is the main 'correct' answer though?

President Ronald Reagan perhaps explained conservative thought on welfare best when he said the following two statements in different speeches over time:

'The best social program is a productive job for anyone who’s willing to work'.

'Welfare’s purpose should be to eliminate, as far as possible, the need for its own existence'.

To many unfamiliar with the liberal/conservative divide over the past 50 years, President Reagan’s words sound like common sense regardless of which side of that divide you may be on.

There was a time in modern American history where the majority of Republicans and Democrats ascribed to that notion of self-sufficiency and hard work.

However, since the advent of the Great Society programs under LBJ in 1965 and subsequent amendments and welfare programs added to our federal budget since then, many on the left have come to see increases in numbers of people on welfare or entitlement programs as a sign of 'success' of the modern welfare state in America.

Conservatives take an opposing view. They tend to see reductions in enrollment numbers as evidenced in the Medicaid hearing as a sign of great success in economic growth policy since many people who were not on Medicaid since 2016 must have found a job and are now working in a productive capacity to provide for themselves and their families.

Republicans see ‘success’ in welfare programs when the need for or dependency on them is dramatically reduced. Every able-bodied individual who can work should work is their line of thinking. It helps self-worth, self-esteem and keeps families and communities together.

If liberals want to help to achieve such a utopian goal, every effort should be made to allow private businesses to expand and hire as many people as possible. Any effort to hamstring American business with over-regulation, higher taxes and more government debt almost by definition frustrates their ability to hire new workers, many of whom need job training and residual education usually provided by the new employer to leave public welfare for good.

Whenever a liberal politician seeks to punish a rich person who has built a business with higher taxes or regulation, they need to keep in mind that the people they are really hurting are the lower-income people currently surviving on welfare programs who will not be hired if taxes, spending and regulations go up.

What is going to be: more government welfare or more personal work opportunities?

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