Comrade Putin

What was Putin doing with his hand wedged in the chair like that?

In Helsinki Trump went completely off the reservation and is now pretty much outside the Fort all by himself. Whether the Fort will reach him in time is an open question, and the survival of his presidency is in play as a result.

What do I think Trump wants? I think he wants full normalization of political relations with Russia, to include military cooperation including joint operations. He wants to work with Russia jointly in the war against Islamists and thereby take the pressure off the U.S. forces. Unlike presidents before him, Trump does not care about the internal politics of other countries. He does not believe that it the responsibility of the United States to be the one to stand up to all the bullies around the world. He believes that sanctions are stupid because they hurt U.S. businesses and help business from other countries whose governments don't participate in the sanctions program. Does he care about the annexation of the Crimean Peninsula or the civil war that Russia directly supports in eastern Ukraine? No, not really. He'd gladly recognize Crimea as part of Russia if Putin abandoned eastern Ukraine, or if Kiev and Moscow could work out a division of the disputed areas.

What is Trump more worried about? Some would say pee tapes, but I think it is the emergence of China as a global superpower. The U.S. national security apparatus is stuck in a habitual and reflexive adversarial relationship with Russia. It is starting to look as if they fear losing Russia as an enemy more than they relish the notion of a world with greater peace. By antagonizing Moscow through sanctions and legislation such as the Magnitsky Act, the West is pushing Russia closer to China, when they have less in common with the Chinese than they do with Western Europe, both culturally and geographically.

I have looked skeptically on Russian "hacking" of our elections, not because they didn't do it, but because it worked. They used the simplest tricks in the book and they only served to uncover the apathy and laziness of the electorate. If anything, the Russians did us a favor: as voters, we have to become more critical readers and we have to ask more important questions. Our democracy is not in danger because of hacked emails or fake Facebook ads. Our democracy is in danger because too few of us have the time or compulsion to look into the facts and would rather believe fantastic reports from the world of alt-news.

In a recent New York Times report, members of the intelligence community related briefings with Trump in the weeks after the 2016 elections in which they showed the transcripts of intercepted telephone calls and emails to Trump to make the case that the Russians had influenced the election, in part, by intercepting the emails of the Democratic National Committee. So, if I read that correctly, the U.S. was intercepting Russian emails at the same time they were intercepting U.S. emails.

Personally, I would like to see improved relations with Russia. I believe that Russia wants what is in Russia's interest the same way thay the United States wants what is in our own interest, but that fact does not preclude cooperation on many levels. The chances of making progress in hot spots around the world, improved control over fissible materials, and more stable energy price over a longer period of time would be some of the results.

Plus, we might be able to count on Russia is we ever have to confront China militarily.

So, as ludicrous as Trump looked in Helsinki, and how poorly he handled things, I kind of agree with what I think he is trying to do.

Get Rid of the Estate Tax Completely, But Use the Original Cost Basis for Valuation

It makes sense my assets should flow freely to the next of kin, or whomever I designate.

The estate tax is fundamentally immoral, in my opinion: assets that I have accumulated over my life with after-tax dollars should be able to freely change hands when I die. Why should an asset that I bequeath suddenly be treated like income for the person who inherits it? I just don't see how that makes sense, and it can force my heirs to make undesirable moves, such as selling assets into a weak market to raise the money to cover the estate tax.

However, another the part of estate law that is equally illogical is how the cost basis changes to the value of an asset at the time of the inheritance.

For example, if I buy a house today for $250K and leave it to my next of kin in 30 years fully paid off and worth $500K he can sell it immediately and pay zero capital gains tax on the sale because the IRS allows him to report that the house cost him $500K, not $250K.

This is fundamentally illogical -- why should the cost basis change if I originally only paid $250K? My next of kin didn't buy the house from me, he simply inherited it.

Currently, estates smaller than $5.34 million are exempt from federal estate tax, which means that my next of kin could inherit my house for free and sell it for free, too, but if I sell it before I die the sale is subject to tax. I'm sorry, but that is just wrong.

So, while I support elimination of the estate tax for estates of any size, I strongly believe that the cost basis for any assets in estates of all sizes should reflect the value at which the assets were originally acquired, not the value when they are inherited.

Anthem Protests by Players Not A Free Speech Issue

A good coach is always on the side of his player.

I understand why NFL players choose to kneel during the National Anthem, and it is not because they do not love America. To the contrary, it is BECAUSE they love America that they do it. America is a great country that is rich with great opportunity. It also has a very dark history, the vestiges of which live on. That is why, in the wake of the #BlackLivesMatter movement that successfully focused attention on racial profiling and the use of excessive force, athletes want to keep the spotlight focused on these lingering problems so that we can engage as a nation in a discussion about how to police effectively without unneccesary hurt and insult.

That being said, if the team owners and the league want them to stand for the national anthem, then they must stand for the national anthem. Standing for the national anthem is a part of their job, just as wearing the uniform that they are given to wear and adhering to a lengthy code of conduct is part of their job.

Can you imagine if a worker at Chik Fil A comes to work with a big anti-abortion pin on her shirt and refuses to take it off? Should they or should they not be fired? Do they have a free speech right to use the exposure that they get as cashier to lobby on behalf of their personal beliefs? No, they do not.

That is why I have been puzzled by the constant vacillation on the part of the owners and the league with regard to the issue of players kneeling. It's really not that complicated; the player is either doing his job and following the rules or he is not. It is not his place to co-opt the anthem to express his own political beliefs or anything else, for that matter.

However, in my opinion, these players are not unpatriotic. It is unpatriotic to turn a blind eye to behavior that runs afoul of our constitutional and civil rights as Americans. It is unpatriotic to not strive to make America a better place, which is exactly what they are trying to do by kneeling down during the anthem.

Hold Family and Community Responsible for Lunatics with Guns

Reinking's family was well aware of his mental problems

Reading initial reports in the press about this lunatic it seems plain as day that the authorities should not have returned his guns and his father should never have given them back to him.

Now, because of stupidity on so many levels, there are four people dead and countless police occupied in a manhunt.

When the dust settles, who can the victims hold responsible?

I advocate for state laws that permit civil law suits against individuals and local or state authorities for failing to report or failing to take action in situations where the gun rights of the mentally ill should have been revoked, but were not.

Additionally, state legislatures need to continue efforts to pass emergency laws that permit the confiscation of weapons where suspicion of mental illness exists.

In most of these cases there are people along the way with the information necessary to put a stop to these killer's plans. Those that fail to act are complicit in the crime.

Too Late for NATO in Syria

Syria is full of Russian specialists and equipment

The chance for the U.S. and NATO to take control of the Syria situation is over. The time to have taken action was when Assad crossed Obama's "red line in the sand" to no effect. At that time, the Russians were on the sidelines, waiting to see how events progressed.

When Putin realized that NATO was not going to go after Assad he filled the void and committed to propping up the regime.

Trump came to the White House and promptly launched a series of cruise missiles to hit targets that were hand-picked for him by the Russians, to almost no effect at all.

Now, there is evidence of another Sarin gas attack. Some say it must be the Syrians, others say that Assad wouldn't be so stupid, it must be the rebels looking to draw NATO into the fight.

In any event, the Russians are there, they own this one and it is their problem.

Too bad, really, but, as they say, "you snooze you lose".

NAFTA = U.S. NATIONAL SECURITY

In the event of a global war, Mexico and Canada will be our most dependable allies.

Every dollar of production that can be shifted from Asia or Europe to North America is a dollar that is being put to work to support the U.S. economy.

The U.S. cannot ever hope to supply everything to everyone at the highest quality and lowest price -- we need trading partners to be successful. And, trading partners who are also our geographic neigbors are the best option.

In the event of a war in the Pacific or Atlantic the sea lanes will be restricted or cut off entirely, but we will be able to keep our northern and southern borders humming.

Additionally, buying finished goods or raw materials from our geographic neighbors increases the likelihood that we will supply the plant and equipment that they need to operate.

I can tell you from first-hand experience most of the heavy equipment used to clear land and construct manufacturing facilities in Mexico comes from the U.S., as does the vast majority of the trucks large and small. Add to that countless other items what we supply, up to an including electricity, and the symbiosis of maintaining free trade in our hemisphere can be clearly seen. Plus, Mexico and Canada are the best markets for our passenger car brands outside of the U.S. itself.

As a manufacturer of equipment that supports production, I count as my customers manufacturers like Stelco (formerly U.S. Steel Canada) and Rassini Suspensiones (leaf and coil springs for the automotive industry) in Mexico. These manufacturers are supplying the U.S. and buying from U.S. companies.

Therefore, I am glad that the White House is planning on raising tariffs on Asia and Europe and exempting Mexico and Canada.

Keeping Our Critical Industries Alive

Some industries are hard to replace when lost.

Behind the proposed tariffs on steel and aluminum is the realization that it is a matter of national security that we retain a vigorous metals production capability to shield against the possible loss of overseas sources of supply.

One of the roles of government is to insure the long-term stability and security of the nation, which must include considerations such as what industries do we need to maintain and at what levels.

What happens, though, when a critical industry faces foreign competition that threatens to put it out of business?

The federal government faces several options in this case:

• Let the industry collapse and hope that it can be ramped back up in time in the event of supply interruptions.
• Subsidize the industry with a combination of tax breaks, direct payments, or other incentives.
• Impose protective tariffs on foreign imports.
• Nationalize the industry and have the government operate it.

Of these options, I consider the second the best option.

Why are subsidies preferible to tariffs?

• Tariffs increase the costs to all industries for the product subject to the tariffs, which acts like a tax on consumers.
• Tariffs are usually met tit-for-tat with other nation's tariffs on our products which hurts our exports.
• The domestic cost of protective tariffs are hard to anticipate or ultimately calculate, but most studies have generally shown that their cost to be quite high, much higher than we would have intended for the number of jobs that are saved.

Therefore, if we are thinking about putting a protective tariff in place, we should first think about helping the industry in question operate profitably under all market conditions, which could include having the U.S. taxpayer taking an equity stake in a struggling business or even partial or full nationalization, much like we did when Detroit was faced with fiscal collapse after the 2008 recession.

It is worth noting that direct support to critical industries is the preferred method that the Chinese have used to grow their own critical businesses, and are one of the reasons why these companies can export their goods at such low prices.

Russian Threats to American Democracy

Can our democracy really be toppled by social media?

Thomas Friedman recently posted what he referred to as a "code red" regarding the threat that Donald Trump poses to U.S. Democracy, in which he argues that the Russians have Trump in such a compromising position that he will do or say whatever they want him to.

If that is true, and I tend to suspect that it is, it is certainly grounds for impeachment, but how is it a threat to our democracy?

I can see how having Putin control both the Russian Republic and the White House would be a threat to our national security and to the role of the U.S. globally, but how it is a threat to our democracy, per se, is less clear.

The key allegation in the Friedman piece is that "Putin used cyberwarfare to poison American politics, to spread fake news, to help elect a chaos candidate, all in order to weaken our democracy." But, what cyber warfare is he referring to? Is he referring to the hack of John Podesta's Gmail account, which I wrote about previously?

Is he talking about the thousands of dollars the Russians spent on Facebook ads? Facebook ads? Really? Is that how we make decisions about who to vote for in this day and age?

Or maybe, he is referring to the spoof Twitter accounts that caused certain hashtags to trend, drawing attention to them, apparently funded by the Russians.

What is next, Photoshopped pictures uploaded to fake Instagram accounts, that are somehow going to influence our politics?

If Friedman is right that the Russians (and by extension, Trump) are an existential threat to our democracy, then the problem is the moral, intellectual and political weakness of the electorate, not suggestive Russian ploys.

I don't care how many Facebook ads get purchased (I don't use Facebook anyway) or what hashtags are trending on Twitter (which I barely pay any attention to in any event). I care about a candidate's background, education, experience, achievements, and plans for the future.

If Facebook is altering the outcome of the elections as so many think it is, then it is because the U.S. electorate is apathetic, lazy, morally vague and doesn't want to put the work in to find out who is the best candidate. And, an apathetic and lazy electorate is definitely a threat to ANY democracy, one with or without foreign enemies.

Don't Pour Gas on a Bonfire

https://www.youtube.com/watch?v=kDz_9kfrcFk

Like a bunch of Yahoos with a pile of wood and a 5 gallon jug of gasoline, Trump and the Republican Congress are ignoring the deficit and pushing for more economic growth when it is obvious that we are already close to full employment.

The important fact that they are ignoring is that we already have over $20 trillion in debt that needs to be periodically refinanced.

Currently, the interest rate on the 10 year bond is below 3% (but climbing quickly), which means that we *only* have to divert about $580 billion a year to service this debt.

But, what if interest rates on the 10 year bond rise to 9%, as they did in the wake of Ronald Reagan's tax cuts in the 1980's? That $580 billion becomes $1.8 trillion in interest payments alone.

The 2015 federal budget was $3.8 trillion, so interest payments of $1.8 trillion would be over half of the federal budget.

Of course, that is not something that the economy can bear, so the Federal Reserve will have to issue additional debt instruments to bridge the gap, which will force them to offer ever higher interest rates, creating a death spiral that will destroy the dollar and the U.S. economy.

What our democratically elected leaders fail to understand is that a nation must take on debt in times of crisis and war, and repay that debt in times of growth.

The Republican bet in this case is that we can grow out of our deficits, but with an additional $1 trillion in deficits already forecast for 2019 (and each subsequent year), the economy would have to grow by $11 trillion (based on a current GDP of about $20 trillion) to bring in the additional revenue to make up the shortfall and balance the budget.

Do we really think we can more than double U.S. economic output over the next four years? That implies an annual growth rate of over 20%.

Here is the historical GDP growth data in the post-WWII period:

https://tradingeconomics.com/united-states/gdp-growth

We've never done it before, but who knows....

In any event, when hyper-inflation hits it will make repayment of the debt MUCH, MUCH EASIER, as inflation will reduce it down to almost nothing.