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Let's hear it for California. (See 1 below.)
And:
For Brexit: https://www.nysun.com/
And:
https://www.investors.com/
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Another Rant. (See 2 below.)
Had lunch today with one of the brightest investment people I know and after 47 years involved in Wall Street I have met a goodly number of truly bright people. He sees the market doing well in 2019 because The Fed has been subdued by Trump and the China trade matter seems to be moving in a better direction. no evidence of a recession and Republicans can block most everything Democrats do because of their Senate numbers.
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Trump get's a rare lift from The Wall Street Journal. (See 3 below.)
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What is free will prove costly. (See 4 below.)
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A license to hate. (See 5 below.)
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Dick
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1) California: Record spending as tax revenue collapses by $5 billion
As California governor Gavin Newsom announced plans for a record $144.2-billion spending plan, the state controller quietly reported a $4.82-billion collapse of state tax revenues.
Gov. Newsom's Proposed 2019-2020 Budget, released on January 9, had all the characteristics of "Rainbows, Butterflies, and Unicorns." Newsom predicted that his state budget beginning on July 1 would feature $6 billion more revenue and only a $100-million increase in spending, despite a $5.2-billion "Cradle-to-Career" education spending increase, a $1-billion earned income tax credit, and $100 million for immigrants fleeing Central America.
Key to Newsom's 2019-2020 budget dream is collecting $4.8 billion more in personal, sales, and corporate tax receipts while slashing "Government Operations" expenditures from $4.8 billion to $1.26 billion, a 76% reduction.
After he campaigned for a $100-billion "Medicare for All" health plan, the San Francisco Chronicle ran the headline: "Gov. Newsom angers no one with budget, puts off big fights for another day." The Chronicle
But away from the Klieg lights and fawning media, California state controller Betty Yee reported that California's personal income tax collections for the month of December missed its 2018-2019 budget estimate by $3.45 billion. More alarming, personal income tax revenue plunged from $11.5 billion in 2017 to just $6.76 billion in 2018.
With California's top 1% of income-earners who make over $500,000 a year paying over half of all state taxes, a portion of the grim tax collection shortfall could have been due to mail delays for filing December quarterly estimated income tax payments. But December 2018 sales tax receipts of $1.16 billion also missed budget by $1.42 billion, and corporation tax collections of $2.09 billion were short of estimates by $179.5 million.
At the start of the July 1, 2018 fiscal year, California's had a mandatory "Special Fund for Economic Uncertainties" reserve with $8.91 billion and a discretionary "Budget Stabilization Account" reserve with $11 billion. The non-partisan Legislative Analyst's Office's November update stated that reserve accounts were expected to grow by $3.1 billion this fiscal year and $6.4 billion in the next year. But the LAO cautioned that with wage and job growth already falling, "the state's budget condition can change quickly."
All of this "Rainbows, Butterflies and Unicorns" contingency planning for California to survive a "moderate recession" was predicated on termed out Gov. Jerry Brown's 2018-2019 budget ending on June 30 with a $20-billion surplus. It probably did not evaluate the cost of the PG&E utility filing for bankruptcy or 30,000 striking L.A. teachers.
If the December tax shortfall means that California is already in recession, the state may be facing a devastating crisis.
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2) The economic numbers out of China continue to get worse and are now to a level that most likely are a real concern to Xi. Consumers are not spending as much and production is slowing quickly now that all the front loaded Christmas and spring shipping is over. Auto sales are the worst in decades. It is possible that the real economic numbers are now very slow growth, but we will never really know. Whatever the actual numbers, it is clear the Chinese economy is under strain. The pressure to do a deal with Trump is building.
2) The economic numbers out of China continue to get worse and are now to a level that most likely are a real concern to Xi. Consumers are not spending as much and production is slowing quickly now that all the front loaded Christmas and spring shipping is over. Auto sales are the worst in decades. It is possible that the real economic numbers are now very slow growth, but we will never really know. Whatever the actual numbers, it is clear the Chinese economy is under strain. The pressure to do a deal with Trump is building.
Brexit has crashed as predicted by everyone. What happens next is impossible to predict. We can only hope there is not a new election with Corbyn winning. That will be a disaster for everyone. He wants to nationalize major industries and that will take the UK back to pre-Thatcher and the economic disaster from that time. I spent a lot of time in the UK back then with a subsidiary there which served auto plants. What I witnessed at that time was economic malaise, until Thatcher arrived and took on socialism and the unions. Like socialists in the US, they never read history and learn what a terrible mess socialism creates. My guess, and it is only a wild guess, is hard Brexit. Now the EU is ready to negotiate with the US on a final trade deal, but they refuse to discuss agriculture. They want free trade, but not for farm products- one of the major exports of the US to the EU. This is going to be a major setback to concluding a deal since farm products are emotional in France and parts of Germany, and Macron cannot afford to have farmers blocking roads and rioting on top of the protests already underway. The EU will then be faced with high auto tariff from the US, which will really harm Germany. This is turning into another mess for the EU just as Brexit blows up. None of this is good for EU investment and there is no reason for Trump to back down. Either there is full fair trade including food products, or there is no reason for the US to do a deal. The EU is acting like it has negotiating leverage on the UK and the US, but in reality they have nothing but further economic decline and dysfunction. Brexit is terrible for the EU and no deal with the US is almost as bad. Stay away from EU investments. While all this is going on there is a group of EU countries led by Italy which is talking of forming an opposition group inside the EU to protest how Brussels is given too much power.
The shutdown is now going to hit Q1 GDP. It continues to boggle the mind that voters have been conned by Dems and the press to believe the wall is a waste of money, and does not work, when the border patrol has proved the existing walls have cut crossings by 90%, or more, and they say they need it. Just basic intelligence that a barrier is more effective than cameras. That is why we have been building walls for many years with Dems in charge. 700 miles of them. Now Dem Congressmen have refused an invite to meet with Trump to discuss a way ahead. That was dumb as now Trump can say the Dems won’t even come to discuss. This is topped off by Pelosi naming the kid from Queens to the finance committee along with the chair Maxine Waters. The press will eat up the insanity that will come out of that committee’s hearings. If this is what is going to happen on everything, DC is going to become a major problem for the economy. Even worse than I feared.
LA teachers are on strike for more money, more aides, and an end to new charter schools. This is to reward them for getting only 40% of the kids to read at grade level, and under 30% in math are at grade level. A teacher retires at 55 with a full pension plus healthcare for life. They want an end to charter schools because, as elsewhere, charters way outperform public schools and are non-union (see any connection?). Charters make unionized public school teachers look incompetent, and failures to the kids from low wage families. If unionized teachers did their job, tens of thousands of poor minority families would not be begging to get into charter schools to give their kids a chance to succeed in life. The system is broke. There is no more money for the overpaid teachers. The tax increase CA had was to help fund school costs to benefit the kids, but instead it all went to the teachers pensions which are eating local budgets. As you can see, the teachers really care about the kids! The teachers union pays off the Dems with huge campaign contributions and free staffing for elections. So this is how Dems in big cities help the poor and struggling minorities- they give the teachers so much comp there is not much left for teaching the kids who have little chance of success in life with these schools run by the unions. We could solve many of the real problems in America if there was a way to get rid of teachers unions. Teachers unions do more damage to minorities than anything Republicans could ever do.
And now Gillette wants to tell me I should no longer be a normal male. I am supposed to be a wienie. I no longer will buy Gillette products, and I will continue to be a red blooded, heterosexual, American male. I think the lefties and Gillette never studied biology, and do not understand that nature made males different than females throughout all species for good reason. Hunter gatherer thing. Procreation of the species. Has not changed in 2 ½ million years since the first homo sapiens walked upright and evolved from chimps in East Africa, and it is not going to change just because some left wingers think it is politically correct that it should.
The attachment is from Michael Poliakoff, President of American Council of Trustees and Alumni which is trying to bring freedom of speech and sanity back to campus. They and FIRE do a great job and deserve your interest and support if this is a topic of interest to you, which it should be. ACTA represents 23,000 trustees. And 1,250 college level schools. They can use all the help they can get from trustees and alumni who are interested in saving education in America.
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3) Trump’s Successful Pivot to Asia
America’s regional allies are relieved to learn that the U.S. isn’t going anywhere—for now.
President Trump signed legislation on the last day of 2018 designed to strengthen America’s role in the Indo-Pacific region. The Asia Reassurance Initiative Act is the most comprehensive statement in a generation of America’s regional interests. It authorizes expenditures of $1.5 billion annually through 2023 to enhance U.S. military, diplomatic and economic engagement with East and Southeast Asian allies such as Japan, India, South Korea and Taiwan. Unlike the Obama administration’s ballyhooed “pivot” to Asia, Mr. Trump’s turn to the East seems to have rattled China’s cage.
The president is regularly attacked by critics for withdrawing from the global stage and undermining the American-led world order, but his goal in Asia is consistent with that of previous administrations from both parties: preserving what the Trump administration calls a “free and open Indo-Pacific.” Mr. Trump has energetically pursued this goal, overturning significant parts of America’s Indo-Pacific policy dating back to the 1970s. His decision to levy tariffs on $250 billion of Chinese goods made clear that Washington is dropping the fiction that China is a fair trading partner. The U.S. military has increased freedom-of-navigation operations and flyovers near China’s new military bases in the South China Sea.
The administration has also abandoned the policy of looking away from Chinese cyberaggression. Moreover, by negotiating directly with North Korean leader Kim Jong Un, Mr. Trump has broken the model of negotiating multilaterally in the hope of compelling Beijing to push Pyongyang to denuclearize.
Mr. Trump is correct that America’s Asia policy needed a reset, and China’s global ambitions make it unlikely that future American presidents will return to business as usual. But if Mr. Trump fails to arrest China’s advances or North Korea’s nuclear successes, his pivot may ultimately diminish U.S. interests in the Indo-Pacific region.
Mr. Trump signed the new law, co-sponsored by Sens. Cory Gardner (R., Colo.) and Edward Markey (D., Mass.), a day before the 40th anniversary of the normalization of U.S.-China relations. The symbolic timing of this gesture is a clear signal that the administration sees China as the world’s greatest threat to U.S. interests. But even without the new law, Mr. Trump’s get-tough attitude toward Beijing sets him apart from his predecessors.
The administration has at last begun retaliating against China’s persistent cyber-espionage and global meddling. In October Belgian authorities arrested a Chinese intelligence officer and extradited him to the U.S., where he will soon face trial for stealing trade secrets from American aviation companies. In December, at the request of the U.S., Canada detained Meng Wanzhou, a senior executive of telecommunications giant Huawei. She is free on bail, but federal prosecutors in the Eastern District of New York are looking to have her extradited so they can charge her with helping companies circumvent American sanctions against Iran.
Though few in Washington will admit it publicly, policy makers on both sides of the aisle see Mr. Trump’s bold stance as long overdue. Yet his Asia pivot is also risky. Some worry he will rush into an agreement with North Korea, perhaps withdrawing U.S. troops from the Korean Peninsula in return for a promise of denuclearization. If Mr. Trump caves in to pressure from Pyongyang, Seoul and Beijing to reach a bad deal, it may be impossible to convince Tokyo and other allies that Washington won’t pack up its troops and leave them to face the Chinese threat on their own.
Arrests and tariffs alone won’t force a change of heart in Beijing. Yet the U.S. administration likely has the upper hand. Global opinion is turning against China and the world’s second-largest economy is suddenly sputtering. Mr. Trump should therefore push for as detailed and verifiable a commitment as possible from Beijing to open its markets further, uphold international law, and crack down on state-sponsored hacking. Because prior Chinese pledges have proved hollow, if Beijing fails to follow through this time, Mr. Trump should immediately restrict the number of Chinese students permitted to study at U.S. universities, place curbs on Chinese tech companies’ American operations, and limit Chinese purchases of American companies and real estate.
No one should be in any doubt about the stakes: Beijing is looking to hasten the day when it replaces the U.S. as the indispensable Indo-Pacific power. America’s allies in the region are watching—some fearfully—to see whether the time has come to cleave to China and support Beijing’s Belt and Road Initiative. Mr. Trump’s pivot may offer the last chance to forestall such an outcome.
Mr. Auslin is a fellow at the Hoover Institution, Stanford University, and the author of “The End of the Asian Century.”
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4) Think College Is Expensive? Wait Until It’s Free
Higher-education costs have risen every time student aid has been made more generous
By
Has the time come for free college?
Democrats certainly think so. President Obama called for tuition-free higher education in his State of the Union address in 2015, and it’s already a reality in some form in at least 17 states. Among progressives, support is almost obligatory, so it’s no shock that Democrats who want to challenge President Trump in 2020—Sen. Elizabeth Warren, Rep. Tulsi Gabbard, former San Antonio Mayor Julián Castro and counting—have jumped on the free-tuition bandwagon.
Europe already has a free-college system, and the argument for an American version has a certain logic to it. There’s a strong correlation between higher education and economic prosperity; advanced societies have large numbers of college-educated citizens while poorer countries do not.
On an individual level, people with college degrees typically make more money and experience lower levels of unemployment. During the nadir of the Great Recession, for example, the jobless rate peaked at 10% for all workers but never rose above 5% for those with at least a bachelor’s degree. The unemployment rate last month was just under 4% overall but closer to 2% for college graduates.
The college-for-all crowd maintains that in addition to increasing a person’s earning potential, university experience has positive spillover effects that are important but hard to quantify. College students make new friends and enjoy new experiences. College graduates are better communicators, commit fewer crimes, and supposedly make more-informed political choices. Increased college attendance is also supposed to promote upward mobility and meritocracy—the American dream. The more college graduates, the better, right? And if the college-educated make our society more prosperous in the long run, what’s wrong with increasing government subsidies to cover everyone’s tuition costs?
Well, plenty, according to Richard Vedder, an economic historian at Ohio University whose new book on higher education, “Restoring the Promise,” is due out later this year. It’s a follow-up to his 2004 tome, “Going Broke by Degree,” and it argues that federal subsidies aren’t the solution to rising college costs—quite the opposite.
I called Mr. Vedder this week to get his take on the free-tuition fad. He said college costs have risen whenever student aid was made more generous. He doesn’t expect it to be any different this time. Tuition is only about 20% of the total cost of attending college. If tuition is subsidized, he expects colleges will raise non-tuition costs.
“I’ve come out very strongly against free college on a whole variety of grounds,” Mr. Vedder said. “But the most important is that a majority of people going to college are not poor. Even at state universities, a majority of the students are from moderately affluent, upper-middle-class families.”
But doesn’t a college education help lift the prospects of poor students who attend? Sometimes, said Mr. Vedder, but you have to graduate first. “Forty percent of our kids who go to college don’t graduate. We have a tremendous dropout rate, much bigger than the high-school dropout rate. These kids are saddled with a certain amount of debt and their earnings prospects are barely equal to that of a high-school grad.”
Though schools ought to be more discriminating about whom they admit, student financial-assistance programs push them to admit students who are not prepared to succeed. In 1970, about 12% of recent college grads came from the bottom 25% of the income distribution. Today, it’s about 10%. “We’ve had a decline in poor people graduating from college. More poor people are attending, but fewer are graduating. We have not really improved making college a vehicle for achieving the American dream.”
And there’s a strong case that the country is already being flooded with college graduates. Even with an unemployment rate below 4%, the number of college graduates is growing faster than the number of jobs requiring a degree. The Great Recession made the mismatch more salient. According to Mr. Vedder, the U.S. had nearly 50% more employed college graduates than it had jobs requiring a college degree by the second decade of the 21st century. More than 13 million bachelor’s degree holders were working jobs that don’t require one.
As the professor sees it, many people who would be better off with a vocational degree or on-the-job training right out of high school are instead pursuing four-year degrees because tuition subsidies have distorted incentives.
Progressive opinion may be ready for free college, but that doesn’t make it a good idea. College isn’t for everyone, and pretending it is does more harm than good, sticking young adults with massive debt when they could have flourished taking another path. As the professor says, “There’s nothing wrong with being a welder who makes $150,000 a year.”
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5) A License To Hate
Recently on CNN, former Republican politico and now Never Trump cable new analyst Rick Wilson characterized Donald Trump’s supporters as his “credulous rube ten-toothed base.”
Wilson was not original in his smear of the 63 million Americans who voted for Trump. He was likely resonating an earlier slander of Politico reporter Marco Caputo. The latter had tweeted of the crowd he saw at a Trump rally: “If you put everyone’s mouths together in this video, you’d get a full set of teeth.”
Was the point of these stereotypes that poor white working-class people who supposedly voted for the controversial Trump understandably ate improperly, did not practice proper dental hygiene, or did not visit dentists—or all three combined?
When challenged, Caputo doubled down on his invective. He snarled,“Oh no! I made fun of garbage people jeering at another person as they falsely accused him of lying and flipped him off. Someone fetch a fainting couch.”
Caputo’s “Garbage people” was also a synonym for the smears that two career FBI agents on separate occasions had called the archetypical Trump voters.
In the released trove of the Department of Justice text communications involving the Clinton email probe, an unidentified FBI employee had texted to another FBI attorney his abject contempt for the proverbial Trump voter and indeed middle America itself:“Trump’s supporters are all poor to middle class, uneducated, lazy POS [“pieces of sh*t”].” In fact, Trump in 2016 received about 90 percent of all Republican votes, about the same ratio as won by both recent presidential candidates John McCain and Mitt Romney.
In the now notorious text communications between Lisa Page and Peter Strzok, fired FBI operatives on Robert Mueller’s special counsel team, Strzok right before the 2016 election had texted his paramour Page: “Just went to a southern Virginia Walmart. I could SMELL the Trump support.”
Recently actor Jim Carey tweeted a picture of Trump supporters as apes, as if evolution is now operating in reverse as Trumpians descend into primate status.
Rep. Hank Johnson (who on prior occasions had referred to Jewish residents on the West Bank as “termites,” and believed that too many American troops based on the shoreline of Guam might “tip” the island over and capsize it) recently compared Trump to Hitler, and characterized Trump’s supporters—which included 90 percent of the Republican Party—as “older, less educated, less prosperous, and they are dying early. Their lifespans are decreasing, and many are dying from alcoholism, drug overdoses, liver disease, or simply a broken heart caused by economic despair." For former Vice President Joe Biden, Trump supporters are “virulent people” and “the dregs of society”.
Note the force of such dehumanizing invective that transcends political differences. Trump voters were not just mistaken in their political allegiances. Instead they looked like toothless zombies and stunk up stores, and are not quite human, and are destined to die off. And all this from supposedly progressive humanists, quick to demonize others who would mimic their venom.
At about the same time as Wilson’s recent smear, multimillionaire TV personality Donny Duetsch weighed in on television about the Trump supporters who favor building a barrier on the southern border to discourage illegal immigration:
“This is all [Trump] has left. That one metaphor, that one thing that talks to that 39, 40, 41% base that says: either the black man, or the brown man, or the Jewish man, or the media man, or the banker man is coming to take your wife?” According to Duetsch’s analysis, were the legions of Democrats—including Sens. Biden and Chuck Schumer—who supported the Secure Fence Act of 2006 that authorized hundreds of miles of border fencing, also worried over their virility or is just the working middle class?
Both Wilson and Deutsch in the past had also characterized Trump supporters as Nazi-like. Both, in lieu of any analyses of why or how Trump got elected or has found success in restoring the economy to robust growth, resorted to crude stereotypes of a constituency in a fashion they knew would be exempt from criticisms of bias and crude stereotyping. Similarly, for historian Jon Meacham and Rep. Stephen Cohen (R-TN), Trump’s audience and appeal are similar to those of the Ku Klux Klan’s of the 1920s.
The New York Times takes loud pride in its adamant opposition to hatred and racial, class, and gender bias—at least in theory. That is why it both hired and understandably fired in the same day tech writer Quinn Norton, once it discovered that she had remained friends with notorious Alt-right racist Andrew Auernheimer, despite claims of frequently disassociating herself from his repugnant views.
Yet the Times hired and kept another tech writer on its editorial board, the racist Harvard Law School grad Sarah Jeong. She had not just befriended a racist, but was an abject hater herself—at least if her twitter trove can be believed. But the difference was twofold, Jeong was Asian-American, and the objects of her hatred were purportedly old and white. And she apparently knew well that such a formula provided her exemption from any criticism for expressing toxicity.
Indeed, Jeong was never shy about her crude dehumanizing venom:“Are white people genetically predisposed to burn faster in the sun, thus logically being only fit to live underground like groveling goblins?” And “Oh man it’s kind of sick how much joy I get out of being cruel to old white men.” And “White people marking up the internet with their opinions like dogs pissing on fire hydrants.” And on and on.
These outbursts were all voiced from highly educated elites (Caputo has a journalism degree from the University of Miami, Deutsch graduated from the Wharton School, Jeong from Harvard Law School, Strzok received a master’s degree from Georgetown, Wilson attended George Washington University). And all engaged in vicious and cowardly stereotyping of a demographic in a manner that they assumed involved no downside. Rather, the smears were delivered on the expectation of winning approbation from their peers. And they did in twitter-fueled competitions to find the crudest pejoratives.
For decades race and gender studies academics had argued that overtly expressed racism against whites was not real racism, but could be contextualized by prior white oppression. In the age of furor against Trump, their theories now went off campus and were being adjudicated by a wider constituency—and yet they did not seem to win agreement from the general public. The irony, of course, is that these professionals displayed far less humanity in their crude putdowns about smells, toothlessness and apes than did the targets of their smears.
But the hatred was not confined to the media and politicos, but rather also came from the very top of the Democratic Party. After the election, a defeated Hillary Clinton openly doubled-down on her earlier smear of Trump’s base as deplorables and irredeemables, in recalibrating Barack Obama’s old saw of the white working class as “clingers” who had failed to appreciate his transformative candidacy. Clinton told an audience in Mumbai, India:
“I won the places that are optimistic, diverse, dynamic, moving forward. And his whole campaign, Make America Great Again, was looking backwards. You don’t like black people getting rights, you don’t like women getting jobs, you don’t want to see that Indian American succeeding more than you are, whatever that problem is, I am going to solve it.”
New York Times reporter Amy Chozick, who had followed the Hillary Clinton 2016 campaign, wrote of the embittered inner Clinton circle: “The Deplorables always got a laugh, over living-room chats in the Hamptons, at dinner parties under the stars on Martha’s Vineyard, over passed hors d’oeuvres in Beverly Hills, and during sunset cocktails in Silicon Valley.”
What is again odd about these examples of open progressive racist, cultural, and class contempt for the American interior, is not just how ubiquitously politicians and journalists voiced them, but also how candidly and indeed confidently they repeated notions of smelly, toothless, ape-like, lazy “garbage people.” In that sense, who hated Trump and what he represented also explains precisely why so many went to the polls to elect him, and perhaps also why Trump’s own uncouthness was in its own manner contextualized by his supporters as a long overdue pushback to the elite disdain and indeed hatred shown them.
What does all this hate speech signify?
One, there is terrible frustration among both the progressive Left (and the Never Trump Right whose luminaries have mused about replacing a supposed spent white working class with purportedly more energetic immigrants). So far Trump has not been stopped. His foreign and domestic agendas often find success and resonate with about 40-45 percent of the American people. Much of the uncouthness, then, reflects their own frustrations and sense of alienation that millions of Americans have tuned them out.
Second, most of the slurs are voiced by elites, especially politicos, journalists, and celebrities. Perhaps their angst is driven by class—as in how can their own superior logic and reasoning fail to resonate with 63 million voters? Answer: Trump voters are hopelessly obtuse to the point that they cannot even take care of their own personal hygiene or are now descending into simian status.
Third, cowardice plays a role. Those who slander the deplorables and irredeemables assume that they can say almost anything and expect no pushback, given the white working classes lack the romance of the poor and the supposed panache of the elite. A race to the bottom develops in which the more the hatred, the more the clicks and the media exposure. Minority critics expect their own identity politics affiliations to shield them from criticism. Wealthy white elites virtue-signal their disgust for those without privilege as a way of ensuring that those like themselves, who most certainly enjoy privilege, are rewarded with ideological exemptions for it.
Finally, we are learning that the entire idea of political correctness was never much about universal ideas of tolerance of the other, or insistence that language and protocols must not stigmatize individuals by lumping them into stereotyped and dehumanized collective groups. What we are witnessing, instead, is that it is fine to demonize millions, from their appearance to their purported hygiene and smell to affinities with feces and apes—if it serves political or cultural agendas.
In sum, cultural progressivism is about raw power, not principle.
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