Corporate Tax Cuts Don’t Mean More Jobs

This NYT article is right, but I think the explanation is simpler. Companies don’t hire because they have extra cash. They hire because there is unmet market demand such that hiring in the short term makes them more profit in the longer term. If the demand is there, most businesses would borrow to hire. At present, and for the last many years, consumer demand is low while corporate cash reserves are high. Do the math. Jobs aren’t there because demand isn’t there. Period.

The standard trickle-down argument says that once companies start hiring, they will put cash in workers pockets, who will then drive up demand. And sure, that would work… if lots of companies hired. But this scenario leaves out some crucial detail about how this has to work. To restate the process:

Companies have to hire workers they don’t need.
Enough companies have to do this that the collective new workers’ paychecks stimulate demand across the economy.
Then (and only then) does the demand materialize that justifies having hired the workers in the first place.
And even after all this, each company is risking that demand will materialize in their particular market. Some of them will be wrong.

Having spent the last 3 decades working in management for and with many companies, I can assure you that very few businesses would take this risk absent some significant exogenous incentive. It’s just not going to happen.

Burn It All Down

You hear it frequently from angry voters, many of whom did, and continue to, support Trump. Burn it all down. They are disgusted with both sides, they feel the American Dream has passed them by, and they think government is the problem. Burn it all down. Since the government hasn’t fixed the problem, we’d be better off without them. Burn it all down.

The frustration is real, and understandable. The American Dream remains a largely unfulfilled promise to millions of citizens. However, for most of these folks, giving in to the emotional satisfaction of a scorched-earth solution is predicated on a fireproof-floor view of the world.

The fireproof-floor view supposes that a state of completely non-functional government is one in which basic services that have long sense faded into the background remain a given. It posits there is a floor below which even anarchy will not fall. That the cleansing flames of the American phoenix cannot damage this base platform as it is consumed and born anew.

Baby Boomers and those who came after have always lived in a society where seniors get Social Security and Medicare. Kids go to public schools. 24×7 electricity and fresh water are available to any home. Food is plentiful and safe to eat. Roads are paved and bridges kept in good repair. Overtime is paid. Workplaces have an obligation toward the safety of employees. And it’s safe to walk the streets. This is the floor onto which we were born, and the floor which it’s hard to fathom falling beneath.

It’s easy to overlook how unusual this floor is in the history of the world. Or in how many places on the planet today it doesn’t yet exist. It’s easy to forget how many people struggled and even died to build this floor. And there is absolutely no reason to assume it’s fireproof.

Before you join this modern-day Nero, dancing to his lyre as the flames ravage Rome, be mindful that fire has no conscience. Once lit, it consumes indiscriminately. It burns all of us, and the floor we are standing on. You may feel like there’s nowhere to fall… but that is a failure of imagination.

An Open Letter to Trump Supporters

Last night, a majority of you, through your action or inaction, elected Trump. I don’t fully understand why, but it kinda doesn’t matter now. That’s done. Water under the proverbial bridge. No backsies. Besides, whatever your motivation, the reality is that you elected Trump’s policies and visions. Further, you swept in a single party to control the White House, Congress, and in short order, the Supreme Court. So there’s little to hinder Trump delivering on what he’s promised… and soon. After all, Trump has been very plain about how much will change on Day 1 or in the First 100 Days. Maybe that’s a bit of hyperbole, but he’s easily got 2 years of pretty unchecked reign to get his agenda on track. He’s got no excuses, so buckle up.

I admit, I don’t really get how a lot of the tactics he’s proposed achieve his goals. Granted, his plans are bit thin on details, but it’s early. And besides, what the hell do I know? I thought I’d be waking up to President-elect Clinton this morning. But in broad strokes, in terms of end objectives, I really do hope he achieves what he’s said.

I’m looking forward to the return of high-paying blue-collar manufacturing jobs, the demise of ISIS and terrorism in general, a better way to keep Iran from nuclear tech, less foreign military deployments, 5% GDP, healthcare that will be so much better than Obamacare, lower taxes, no federal deficits, reductions in violent crime, better educations for our kids, having the VA fixed and providing for our vets, restructuring all our international trade deals and alliances to our benefit, saving Social Security, and rebuilding our crumbling infrastructure. It’s ambitious, but if Trump can make even a dent in a significant part of that list without cratering the economy or the environment, sowing civil unrest, or disenfranchising any segments of US citizens, then I’ll be first in line to eat crow.

Conversely, if Trump’s plan for America leads to some substantive combination of a tanking economy, spiraling debt, cuts to essential government services, debilitating trade wars, actual wars, civil unrest, higher unemployment, increased terrorism, loss of personal freedoms, or runaway environmental crises, then that’s on you. You own that. History will make you accountable.

Meanwhile, I’m gonna sit back and let this play out. Just try to keep in mind that this is what you wanted. And remember, I’m pulling for you. We’re all in this together now. Don’t fuck it up.

Does Voting Third-Party Send a Message?

One of the discussions started by my previous post was on the value of third-party Presidential votes as a means to send a message to the major parties and influence their future platforms. The thinking being that if Gary Johnson gets 20% of the vote, that the Republicans would recognize that Libertarian ideals were more popular than they thought and realign to capture more of those voters in the next cycle. Presumably a similar showing by Jill Stein might heavily influence Democrats.

While I can see the logic in this, it’s unclear to me there’s a lot of evidence for this strategy working in the past. But then rarely do third-party tickets attract more than noise, so there’s not much data here. Still, I think the evidence for the efficacy of Berners or the Tea Party influencing their party’s platforms from within is far stronger than the case for exogenous forces. So even if the third-party approach works, it’s unclear it’s the most effective strategy to achieve change.

Regardless, the unique structure of this year’s election cycle makes the likelihood of either party being influenced by a third-party’s performance negligible. Specifically, both parties are aware they are running very unique candidates. Clinton is toting a ridiculous amount of baggage and is vying to be both the first woman and first Presidential spouse ever elected. Trump is a generational anomaly almost defying description. He is reviled by many in his own party and most of the GOP establishment would jettison him in a heartbeat if they could do it without sending the party into a death spiral.

In this environment, if either or even both major candidates have their ass handed to them in November by Johnson or Stein, it won’t be attributed to the strength of the Libertarian or Green party platforms. It will be attributed to the weakness and uniqueness of the party’s own nominee. Even Johnson’s own campaign is trying to exploit this by emphasizing that voting for him is a vote against both Trump and Clinton (as opposed to a vote for the Libertarian platform). Regardless of the outcome, I think both parties are already trying to figure out how they can never have anything like this election cycle happen again. The third-parties are irrelevant (at least in 2016).

I stand by my initial assertion. Third-party votes are functionally equivalent to abstentions. Still, I suppose if they get you to the booth to vote the down-ticket races, then that’s a good thing. But before abstaining, you should be damned sure you’re prepared to live with either outcome, because you will live with one of them.

Remember the Brexit. Don’t wake up on November 9th with regrets because what you assumed was going to happen despite your (in)actions did not.

Should You Vote Third-Party?

In short, no. That is, unless you’re truly fine with either a Trump or a Clinton Presidency. Here’s why.

The appeal of a third-party vote is understandable. Neither Trump or Clinton are particularly compelling candidates. But it’s important to recognize that while voting for Gary Johnson or Jill Stein may feel good, and may be dutifully registering your protest, at the end of the day, either Trump or Clinton will still be President. This is not just a matter of resignation, but a matter of the structure of American government. Our winner-take-all approach to elections assures there will never be more than two major parties. Who those parties are may change. After all, before Republicans we had Whigs. What those parties represent may change. I’m pretty sure Lincoln’s GOP wouldn’t recognize today’s platform as the same party in anything but name. But in a twist on The Highlander, “There can be only two.” It’s fundamental to the design laid out in the Constitution. Short of changing that document, we are not, and will not be, a multi-party system like the Parliamentary forms of government found in Canada, Australia, and most of Europe.

Further, bear in mind that the best possible outcome of having a popular third-party candidate is that no one gets 270 electoral votes in November. But this means that the House now gets to elect the President from among the top three finishers. The House is presently controlled by the GOP. You do the math.

So if you believe neither party represents you, work to change one of them, or even to supplant one. But supplanting a party doesn’t start at the top. Electing a Green Party or Libertarian President provides no support for that party’s platform in the other branches of government. The Congress, the courts, the states are still all controlled by Democrats or Republicans. So even if they were to win, for Stein or Johnson to actually accomplish anything, they’d need to align with one party or other and settle for nudging that party’s platform a wee bit in their direction. Otherwise, they’d just sit out their term tilting at windmills. Until we start seeing Libertarian, Green, or other party controlled states electing that party’s people to Congress, a third-party Presidential candidate is just a show pony. It’s a target for your protest vote and nothing more.

The reality, like it or not, is there will be a President Clinton or a President Trump in January, 2017. You may have very well-founded reasons why you can’t stand either of them, but it boarders on inconceivable that you would be equally content with either outcome. There couldn’t be more daylight between the positions these two and their parties are taking in this election. If you’re truly ambivalent, then you are either too ill-informed or too apathetic to bother voting at all.

It may well be that you only care who doesn’t become President. But you care. Post your protests on Facebook and Twitter, but when you walk into that voting booth in November, make a useful decision. Suck it up. You don’t need to admit it to anyone else. It’s a secret you can take to your grave. But make a difference. Make your vote count. The stakes have never been higher.